This physician, with four children including two with special needs, retired earlier this year but takes on temporary assignments. With their financial “number” having been surpassed by a factor of two, working is definitely a choice for our interviewee today, and certainly not a necessity.

You might wonder how sailing past double your target number be swayed by luck or skill. Our interviewee today says it’s as much living below one’s means and investing regularly as it is any sort of luck involved.

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 household spends about $100,000 per year, not counting taxes. We could spend about twice that amount while still abiding by the 4% rule.

 

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

I am 57 and my wife is 59 years old. We have 4 adult children. Our household consists of mainly the two of us, but our oldest daughter, in her mid-twenties, who works full time, lives with us.

Though she works full-time, she has some special needs that make it difficult to live on her own. She probably would not be able to afford to live on her own in the area where we resid. So in a sense, we support her financially (mostly by providing for her housing-related costs) and socially.

Our 2nd daughter is a couple of years younger, works full-time, and can support herself on her own. Our 3rd child is a son, who is in the military, and our 4th has mental illness, does not work, and needs to be supported through the services of the government.

 

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

I retired in September, though I still take on temporary assignments. The need to work has abated, and it’s amazing how quickly your thoughts are occupied by other matters. Where did the time go when it was spent on work?

It’s been an interesting journey of self-discovery over the last 7+ years because the psychology of how I think about myself has dramatically changed in these years. Sure, my attitude toward work has changed, but it was a gradual process often accelerated by the events I experienced along the way.

Interestingly, right after residency, and for the first 15 years, I felt that I would do that work for free because it was enjoyable, gratifying, and gave me purpose. It was fun to do the work and make the money that I was making.

I didn’t really think about FI or what that meant during the first 20 years of post-residency practice. But somewhere in 2014, due to changes in the hospital administration personnel and some events that transpired, in 2014 and early 2015, for the first time, I could see myself even changing to a different workplace.

So by mid-2015, I left my hospital-based practice and administrative leadership roles and started working for the State hospital system. What a learning experience that was. Both my mindset and the environment in which I worked were such that immersing myself was difficult.

In fact, I made a conscious choice not to immerse myself, to have strict boundaries about time, limit my interactions with others in the field. Part of it was that I wanted to be protective of my time. Part of it was that I was working to fill my time. Part of it was to make some money.

My current goal is to work primarily to spend time teaching, mentoring, and coaching other clinicians to sharpen their skill levels.

 

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?

I never thought about retirement in the usual way that retirement was thought of when I started my career in 1995. Of course, the concept of retirement has evolved dramatically over this time that spans 4 decades.

My mindset early in my career was that I enjoyed what I was doing, and couldn’t believe that I got paid to do the work, which I would probably do for free if another source of financial support could pay my bills.

I thought of retirement as working fewer hours than the hectic pace of working 50-60 hours per week I was putting in during those 20 years. In fact, I had a formula in my mind for determining how much to work at any given age.

I would work 80 minus my age as the hours per week. So when I was 50, I would work 30 hours per week, and at age 60, I would work 20 hours per week.

 

Investing

 

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

The asset allocation of my assets is as follows:

Stocks: 75%

Bonds: 5%

Rental Real Estate: 10%

Cash: 10%

 

The passive income allocation from my assets is as follows:

Stocks: 73%

Bonds: 5%

Rental Real Estate: 20%

Cash: 2%

 

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

About a quarter of my net worth is in tax-deferred, another quarter is in Roth, and about half is in taxable accounts.

 

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

We do not have any HSAs.

When my children were younger, we had a 529 plan for each of them. However, the money left over in a 529 plan will be used someday by grandchildren or grandnieces and nephews.

 

What has been your best investment?

If by investment, we mean actions that were taken which pay dividends later, then my best investment was marrying my wife.

My second best investment was not a specific action but a series of actions that were more automatic for my personality, (not conscious, per se) but significantly influential in my financial life: living below my means.

In that sense, I have been very lucky to be able to accumulate wealth by doing things that come naturally (luck versus skill). Investing in real estate has been profitable as well.

 

Your worst investment?

Going into the great recession of 2008, I had saved up a significant amount of cash reserves which could be deployed into buying stocks.

However, my worst investment decision was to put pull out some money after it had increased by 10% in hopes of it going back down to purchase it again. The price never decreased to my lower buy point.

Other bad decisions I have made include buying something because of FOMO or YOLO.

 

 

Post-FI Life

 

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

I volunteer my time for a local outdoor activities organization. My free time is variable most days and weeks.

At the very least, I spend some time walking, several times per week. I enjoy photography and learning about Photoshop.

 

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

I enjoy travel with my wife. Together we take 2-3 trips per year. I also enjoy leading hiking and outdoor excursions to varied locations around the world.

In the last 18 months, my wife and I have traveled to Portugal, Peru, and Italy. I have also been to Kauai, the Big Island, and Nepal. There was something interesting, fascinating, and educational about each of these trips.

Travel helps me practice gratitude on many levels, such as feeling small in the vastness of the universe, feeling fortunate to be alive, being aware of breathing, moment to moment, and everything in between.

 

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

Giving money and time are incorporated into our day-to-day life for both my wife and me. We have also set up a donor-advised fund, which currently contains over $200,000, based on giving about 50% of my after-tax earned income in each of the last two years of my (more than) full-time work.

I tend to gravitate towards donating to organizations whose mission correlates to helping people do things that have a lasting benefit, such as education, health, and business. I also tend to gravitate towards charities that are smaller, have fewer expenses, and are not likely to be noticed otherwise.

I spend some time each month researching and reviewing charitable organizations for one-time and ongoing giving activities. Finally, I have been providing other doctors and clinicians with financial literacy seminars.

 

 

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

I still do work, but I tend to pick and choose what I do carefully. I like many aspects of the work, and not needing to work definitely creates a different psychological lens through which work is viewed.

I am more interested in teaching and mentoring other clinicians, and there is a small niche within medicine where one can be paid for such work.

 

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

Life decisions are (usually) made with counterparties. Often what motivates each party to partake in the deal is not obvious. You are either a time-sensitive counterparty or a price-sensitive counterparty.

In financial matters, be a price-sensitive counterparty (buy things that you don’t have to sell because you can wait it out).

Be very aware and even more careful of the subtle and persistent effects on your behaviors of our innate human need to belong to “a tribe” and our inability as humans to intuitively grasp non-linear functions (like compound interest and the psychological experience of the passage of time).

Lastly, pay careful attention to things that turn out well resulting from luck rather than skill. Separating the influence of luck from skill can be a large part of striving for humility, especially in all matters financial.

Having a relatively high income will create a wide buffer for doing many things wrong. Save like you won’t be able to save later.

Spend less than 50% of your after-tax income – in other words, try to achieve a high savings rate. Invest like the world will not end, and progress will be made in imperceptible zig-zags, all the while it feels like the world is ending.

 

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.