This Northeastern surgical subspecialist has cracked the eight-figure mark in net worth, with the majority of it in index funds. He started around 30 and in the ensuing 20-ish years, with a successful career and prudent (if not titillating) investing, has made his family quite wealthy.
Our guest today shares his story of career success and soul-crushing EMR and response work, and how “one more year” can manifest itself even as one’s wealth grows past abundance and into…well, yes, it’s safe to say, rich.
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
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?
My current net worth after the recent stock market decline is about $10 million. That consists of about $8,000,000 in investable assets, and about $2,000,000 in real estate, like our practice real estate, house, cottage, and timberland. I am not including three classic cars, an extensive firearm collection, and other personal items.
We are debt-free and own our house, cottage, timberland, and all vehicles free and clear.
I would estimate we spend $150,000 per year. By the 4% rule, we could spend $320,000.
Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?
My wife and I are in our mid-40s and have three children, ages 10, 8, and 7. My wife stays at home with the kids. We are not supporting anyone outside the home. We live in the Northeast.
Are you still working? In what career? Did your work schedule or attitude towards work change once you knew you were FI?
Yes, I am still working as a heavily procedure-oriented surgical subspecialist. As my net worth increased, I decreased my schedule to four days per week. I also pay my partners to take my weekend call.
Once I realized I was FI, I feel it actually increased my burnout, believe it or not.
It has become much more difficult sitting through work meetings and dealing with hospital and administrative nonsense. I have very little tolerance for any unproductive activity that wastes my extremely precious time.
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?
It was never a long-term goal until about age 40. The stresses of my medical career just kept building up, and when several children came along, it became very difficult to balance everything.
I remember studying for my board recertification at age 40 while on vacation and saying to myself, I am never doing this again.
I pledged to myself I would be done at 50 when my next recertification was due at the latest. Unfortunately, I am finding it very difficult to finally pull the plug, and I continue to suffer from “one more year syndrome.”
How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
My brokerage account is 80% stocks and 20% bonds — all invested in very low-cost index funds through Fidelity. Everything I have left over after expenses each month is very boringly invested in these funds, month after month after month, year after year.
We also max out I Bonds each year ($25,000) and have for many years.
We also own our house, a lake cottage, and several timberlands and recreational properties amounting to several hundred acres free and clear. I paid off all my debt years ago.
The timberland is largely used for hunting and other recreation. However, timber harvests every 10 years or so, as well as significant price appreciation, have made this an excellent investment.
Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?
75% is after-tax. I have the remainder in Roth IRA, 401(k), and cash balance plans. I max my 401(k) ($61,000) as well as a cash balance plan ($105,000) each year. I continue to do the backdoor Roth each year for both my wife and me.
Do you have investments in an HSA? How about 529 Plans?
Yes, I max out our HSA each year. I contribute $10,000 per child each year to our state 529 plan.
What has been your best investment?
It was coming out of training and joining a private practice rather than remaining in academia. I simply cannot stress enough how important this was. It would have been very easy and comfortable for me to stay at the university at which I trained, and they made it very tempting with a signing bonus and a nice salary.
In contrast, my salary for private practice was initially about $100,000 less with no signing bonus. I believed in myself, took a leap of faith, and built my practice from scratch, and it paid off tremendously.
Within 2 years I was making three to four times I would have made in academia and I gained real estate equity on top of it. In addition, I was able to invest over 6 figures ($165,000) tax-free each year because of our group’s retirement plans in addition to my taxable investments. There is simply no way I would be anywhere close to where I am now if I would have stayed in academia
A close second was investing only in very low-cost broad-based index funds and managing them myself. I took a keen interest in investing, and I read financial websites for about an hour each day and accumulated a collection of about 30 of the classic investing books that are often encouraged on this site. I have read and reread all of them often.
I have avoided all the classic (and many times foolish) doctor investments that have plagued my partners.
Your worst investment?
I really cannot think of any. I have always lived beneath my means and invested in broad-based market index funds every month. Very, very dull, but doing so has proven extremely effective.
What do you like to do with your free time? How much free time do you have these days?
Where do I start? I have so many interests and hobbies. I try to exercise two hours each day. I love the outdoors and have loved it since I was a child. Hunting, fishing, gardening, timber and woodland management, heavy equipment, classic car restoration, shooting and firearms, archery, making maple syrup, biking, reading…you get the picture.
I have minimal free time. Medicine seems never ending and this has significantly worsened and continues to worsen since the EMR onslaught began. I begin my day at 5 am and do two hours of inbox work before 7 am, and this continues on any break in patients during the day. As soon as it is cleared, it fills back up. The patient messages are never-ending, and now I am expected to be accessible via phone messages and email messages from patients. It has completely exhausted me and taken much of the joy out of medicine for me. It has become truly soul-crushing.
Do you enjoy travel? Tell us about a favorite trip you’ve taken.
Yes, we are very simple people and enjoy the outdoors and thus most of our trips focus on this. We also spend significant time at our cottage especially during the summer for the lake and skiing in the winter.
Do you incorporate giving (money or time) into your post-FI life?
Not directly. I give out significant free care to my indigent patients.
If retired, do you miss work? Do you get bored?
I am not yet retired, but do not foresee any issues with getting bored.
I look forward to the day when I can go on vacation and not be checking my inbox daily, or the day I can have carefree time to spend with my kids. Medicine is never-ending and I want my life back.
What advice do you have for others hoping to achieve the financial success you’ve found?
Live within your means, and invest regularly and consistently in low-cost broad-based index funds. Avoid foolish doctor investments.
Avoid lifestyle creep until later in your career when you have accumulated significant assets—those first few years as an attending really set the course for the rest of your investing life. Every dollar you invest at age 30 is worth significantly more than the same dollar invested in your 40s or 50s.
Try to develop an interest in investing. Even a simple task of taking half an hour each day to read this website and other popular sites will put you far ahead of most of your colleagues
Finally, be humble. Treat everyone with respect. Do not look down on people because they are not as successful as you.
Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.
I have found it very hard to make the decision to retire. I have worked very hard to get where I am and going part-time is not an option in my group or specialty. I would need to close my practice and leave my group. When would you “pull the plug”?
Second, my group is entertaining the idea of building a surgery center. If I continued to practice, would you invest in this or avoid this? While this could be a great investment, a large part of me feels that it would be foolish for me to take the risk at this point in my career.