The Sunday Best (6/10/2018)


The Sunday Best is a collection of articles I’ve curated for your reading pleasure.

Expect most of the writing to be from recent weeks and consistent with the themes presented on this website: investing & taxes, financial independence, early retirement, and physician issues.

 

Presenting, this week’s Sunday Best:

 

So this is pretty cool. Of Mice and Money took my Tale of 4 Physicians post and did some serious number crunching, creating all sorts of new graphs and comparing best and worst case scenarios for Drs. A, B, C, and D. Case 3: The Four Physicians.

 

thedisabilitydocBloggers often riff off one another with similar or contrasting ideas. Here is a prime example from a couple of personal finance’s best.

 

Speaking of useless hacks, I believe The White Coat Investor has been called exactly that by an unscrupulous financial advisor or two. I’ve compiled a list of some of the best low-cost fee-only financial advisors with scruples. And the WCI recently discussed The Value of an Advisor.

 

Will an advisor help you beat the market? Highly unlikely, at least not consistently. The Wall Street Physician examines The Seven Types of Investors Who Beat the Market (and Why You Aren’t One of Them).

 

Can’t beat the market? Win with student loans! If you’re planning to have student loans forgiven via PSLF, Travis Hornsby of Student Loan Planner, who married a physician with some serious student loan debt, implores Physicians Planning on PSLF Desperately Need to Invest More Money.

 

There’s no good way to segue from that to this, but I think you’ll find this money story fascinating and disheartening. From our accountant friend living in South America, the Corporate Monkey CPA tells a sordid tale of Money, Greed, & Blood (in that order): A Peruvian Potato-Field War.

 

Planning a trip abroad? Consider bypassing the bloody potato fields and take some outstanding tips from a young family that has been traveling nearly non-stop for the past few years since taking an early retirement. From Go Curry Cracker, Trip Planning, GCC style.

 

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Or perhaps you’d rather get the lowdown from a physician who’s mastered the digital nomad life. Dr. Mo of Urgent Care Career gives a thorough breakdown of the logistics involved in Planning an Extended Stay Overseas.

 

Some people spread their wings to travel the world. Others like to lay down roots. Hedge fund escapee Chelsea from Mama Fish Saves visits Keep Thrifty to discuss Creating Our Dream Life: Work & A Little Homestead.

 

Jon from ESI Money retired from the corporate world at 52, continued blogging, and bought another business. He explains how and why in this guest post at Financial SamuraiWhy I Bought A Business After Retiring: The Rockstar Finance Acquisition.

 

Why Do You Work?

 

I recognized the username of a reader when browsing the Bogleheads forum the other day. The doctor, who goes by the moniker EnjoyIt, posed the following question in this thread:

 

“I can see working for some goals such as making sure you are debt free and the kids get a college education. But then why do you work? Sure make sure we have a roof over our heads and well fed. Okay but after those are covered why do you keep earning money?

What I notice is that there is no limit to how much one can spend. And there is no limit to “more.” If someone has a reasonable car to get around, one can always work to buy a nicer car. I wonder though when considering the cost of the nicer car, after taxes over long-term this difference can be hundreds of thousands if invested. What about other items. A nicer TV can cost an extra thousand, a nicer coffee pot, nicer plates, nicer watch, it all adds up over the years. It gets even more interesting when we want a slightly bigger home or a slightly nicer location. Some areas will cost 10-20 times as much for a similar home simply because it is in a nicer location. Does all the extra time spent earning money provide the benefit of “better stuff?” I ask especially because there is no end to “better.” There is always something better.

bankofamericaFor example, I was recently looking at homes in a nicer part of town that will cost about 40% more than our current home. As a reference this home would be 2.5x salary and our current home has 9 years left in a 15 year mortgage. The home is a bit bigger with nicer amenities. I calculate to own this home, pay for the extra property tax, extra maintenance, extra utilities, as well as save up the extra money needed to retire and still be able to live in this home, I will have to work an extra 5333 hours or 664 days or 132 weeks. for me, all that extra time working just seems silly to live in a slightly nicer area but that is just me. Although I enjoy my work it so much more enjoyable when working part time. Plus, my life outside of work is so much more enjoyable when working part time.

I have a friend that works 6 days a week to be able to afford a 8,000 sqft home in an amazing neighborhood. The place is gorgeous. But is it worth the time she is losing away from family, friends, and hobbies?” -EnjoyIt

 

Why do I work?

 

The answer has changed several times in my now 12-year post-residency career.

At first, I worked because I was excited to work! I had, in some capacity, been working my whole life towards gaining the ability to perform this one particular job, and now I could actually do it and get paid really well! I finished residency on Friday, June 30th and started working Monday, July 3rd.

That initial excitement lost its shine over time, but I was still happy to work and required to work, because I had obligations. Student loans, a half-a-million dollar construction loan, and a wife and two little boys to support.

Eventually, we became debt-free. No student loans, no mortgage, no car note. I worked because that’s what grown-ups do. They work, enjoy a handful of weeks off every year, and most weekends, too. I worked because I knew I’d want to retire someday, and I figured I’d need a lot of money to do that.

A few years ago, I figured out about how much money we’d actually need to retire, and lo and behold, we had it. It wasn’t until then that I actually started to ask myself why I work. It never occurred to me that work could indeed be optional in one’s forties, at least not for me.

But now, I continue to work purely by choice, and I haven’t found enough good reasons to continue indefinitely, so I’m planning to wrap up this career in medicine soon enough, perhaps as early as next year.

 

Why wait? This is why I work:

  • Loyalty. My employer has hired my replacement, and he arrives a year from July. Leaving in the interim would leave my colleagues and the facilities in which we work in a bit of a bind. I don’t want to do that to them.
  • Charity. I’ve been donating heavily to donor advised funds with the not-necessarily necessary money I’ve been earning in recent years.
  • Love. There are things I despise about the job. But there are aspects that I love and I know I will miss. I get to be a part of some pretty amazing days in people’s lives.
  • Fear. Of retiring on the verge of a market crash, of what people will think of my lazy a**, and of regretting a too-early retirement later on. The fear of regret is strong.

 

I’ll ask you again. Why do you work?

 


You're still not using Personal Capital? That's how I track the PoF portfolio.

 

A Recommended Insurance Agent

 

I’ll be featuring one of our recommended disability and term life insurance agents here from time to time. If you’re finishing residency or fellowship and about to move on, this would be an ideal time to compare rates before and after graduation and / or a move.

To find the list, click here or find them under the “Recommended” tab in the header.

 

Recommended Insurance Agents

 

You may recognize Jamie Fleischner from her recent guest post on obtaining discounts on disability insurance. Her banner has graced the top of my page for a couple years now, and she has given great advice and quality service to numerous readers.

 

Set For Life Insurance

Since 1993, Set For Life Insurance has been a national leader in helping thousands of physicians with their disability insurance needs. They have the largest portfolio of available exclusive discounts in the country. Set for Life also has the largest availability of unisex rates nationwide helping women save significantly. As independent brokers, they shop around and help compare plans to find the most suitable policy at the best available price. Jamie Fleischner, President of Set for Life, is known for her responsive, knowledgeable, and down to earth manner when working with her clients. Set for Life Insurance Application

 

Have an insightful week!

-Physician on FIRE

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21 comments

  • Congratulations on putting an end to one more year syndrome with actual plans to leave in the next year.

    I respect you staying for helping out the group until a replacement arrives. I think I too would do something similar with similar circumstances.

    I like the boglehead reference to the doctor posing that scenario. Very true that there is always something nicer. You have to be content with what you have or you will always be chasing something and delaying your financial independence.

    That potato farm read I came across before and it is really nicely done. Never heard of it until then but it was fascinating to see human behavior at play and gives plenty of advice of what not to do.

    Thanks for the great collection yet again

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  • I work for a lot of reasons but the brief version is, “I work because I want to work.” I have “enough” to not work for money. Working for money should be optional for doctors in their late forties, early fifties and beyond. At least that is the goal I try to help them with. I hate to see tired doctors in their late fifties or early sixties stressing about their “productivity.” I think we should all strive to achieve FI even without a plan to RE.
    The time working vs luxury expenditure is an important topic. It was handled best (in my opinion) in the book, “Your money or your life.”

  • I work right now because I love it and because I have to. I am working towards financial independence when I’ll cut to working part time so that I can have more time for the things I love outside of work.

    I will also want to keep my skills up at that point so that I can do mission work.

    Good round up, POF!

  • Great round-up. I will do some reading this morning. Why do I keep working? Working is optional now and has been for a long time. I think I like the structure of going to work a few days per week. I also like health insurance. I am being offered another job as I retire my practice so I am thinking hard about this now. The devil is in the details.
    I wrote a post about the factors associated with my financial success. No surprise here...Luck, hard work, and a few good habits.

  • Ted

    With respect to EnjoyIt’s comments, there is a great book on the subject of “enough “. It is “Less Is More”, by Goldian VandenBroeck, an anthology of quotes by both ancient and modern writers discussing the limits of material satisfaction.

  • Gasem

    I don’t work. I have more than I need so continuing to work is a waste of my time. I don’t have side gigs or consulting. I’m going to renew my medical license one more time and then let that go, but I’m considering getting into some volunteer work in addiction medicine since the need is great and I have some expertise, and I have the time. If I do that I may keep the license active.

    • That’s a wonderful idea, Gasem. The need is huge and lives are at stake every day. I’ve wondered how I might best make an impact later on after I’ve had some time to decompress after my possibly-permanent sabbatical next year. Putting a dent in the opioid crisis in some way would be huge. I hope you’re able to find a way to make an impact yourself.

      Cheers!
      -PoF

  • Congratulations on your FIRE exit next year. I currently work because I have too, but this year, for the first time, our family has hit a 50% savings rate. I am about halfway to FI but making great strides. Thanks PoF.

    • If you’re halfway in terms of dollars, you’re probably 2/3 or more of the way there in terms of time. With any luck, your invested dollars will do a lot of the work from here on out.

      Cheers!
      -PoF

  • M

    I’m in my mid-40’s and FI, but I continue to work because:

    – I still feel like I’m making a positive impact for my patients.
    – There are a few things I do within my specialty that not many others do in my area, so I feel needed.
    – I need to feel productive (even my down time consists of some sort of productive endeavor), so working provides that structure.
    – I’m a bit scared to get off the train completely, as this whole FIRE thing is still a “fringe idea.” Even though I’ve run the calculators and the chance of outliving my money is almost zero, it’s still nerve wracking to jump into the void when most of the rest of the world has feet firmly planted on the ground.

    But, I am about to make another cut to my clinical hours, such that I’ll be seeing patients no more than 20-22 hours per week. I still have some administrative duties, but I’m looking forward to having even more free time – kind of test driving being semi-retired. Baby steps!

    • All good reasons, for sure. I’m doing something similar. Waded into the waters by working less. I wasn’t ready to dive right into the deep end. But so far, the waters have been warm and calm.

      Best wishes on your continued transition.

      Cheers!
      -PoF

  • We’re not FI yet, but even when we are – I love what I do. I love being a nurse. I ditched school when I was 15 or something, took the train into Boston, got my CNA license at the Red Cross, and have been at the bedside ever since. I used to ditch school in the afternoon to go work in the ER (lots of ditching school back then, and now I have a doctorate :). It’s all I’ve ever wanted to be. So the idea of quitting that entirely is just not there for me yet. I’ll need to figure out the balance between traveling as much as we want to and possibly living overseas, with my desire to continue working for pleasure even when we don’t need the income… There are worse problems to have, but it is a real concern..

  • GXA

    Thanks for the thoughtful post!

    Having also achieved FI a few years ago, I continue to work because:
    – I enjoy coming to work (I feel I do a good job with patients and our departments)
    – The money is good (I know I have enough, but we can give more away and leave more for our kids)
    – I get plenty of time off (I could easily take a week or more off each month and we are able to travel often)
    – I still have kids at home and in school (So the plan is to wind down over the next 5-7 years )
    – Also a bit scared to get off the train…

  • Good post, Doc. I work because it keeps my mind sharp in a field I have chosen to build my career in. I also work because it allows me to make mistakes – that is, I can indulge in stock market speculations (beyond my retirement portfolio) and not worry constantly about whether our family will have enough to live on. Most of all, I work because I want to set an example to my young son that there is no substitute to hard work to earn money. I do worry about what an example it would set if he sees me around the house all the time.

    Even if I retire early, I will plan to be out of the house by the time he returns from school so that he thinks Daddy is still “working hard” to put food on the table. I personally believe learning about ER is better after you start working, and until then, hunker down and study hard to get gainful employment and then work hard in that job or work hard in a business.

    I believe in age-appropriate lessons and FIRE is one such lesson. In today’s world, adequacy of wealth for FIRE can be easily mis-interpreted as “being rich” (by kids, especially if they see all other dads/moms working for money). I don’t know when the tipping point for FIRE awareness for kids are, but I would guess college level would be appropriate. We can talk about importance of savings and investments till then.

  • Thanks for the share! Is it routine to start your first post-attending job so quickly after residency in anesthesia, or were you just super eager to start cashing the big checks?

    • I was eager. I had taken out a loan from the Anesthesia Foundation of about $6,000 to fund my residency lifestyle. I paid it back with my first week’s paycheck.

      Back then, the written Board exam was given the second Saturday in July. I was the only one of 20+ residents I graduated with working that first week. Everyone else took that time to study, which I thought was pretty silly, since we’d essentially been studying for that exam for three years. What’s another week going to do for you?

      Cheers!
      -PoF

  • God created us to “tend the garden” so it’s in our very nature to work.

  • Such a brief explanation. I must say very very impressive info. Thanks for sharing such an impressive info with us.

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