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White Coat Investor Podcast
MtoM #247: Primary Care Doc Becomes Multimillionaire and Retires Her Husband and Finance 101: Financial Independence
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A
This is the White Coat Investor Podcast Milestones to Millionaire Celebrating stories of success along the journey to financial freedom.
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This is Milestones to millionaire number 247. Primary care doc becomes multimillionaire and retires her husband Goodman Capital is a premier real estate credit investment firm specializing in senior secured low loan to value lending on class A properties in prime markets across the greater New York metro area. Founded on family legacy Dating back to 1987, Goodman has closed more than 850 million plus across 95 plus loans with a track record of zero principal loss. Their flagship private mortgage REIT Liquid Credit Strategy Fund 1 delivered a steady 9% net dividend yield since inception at a very conservative sub 50% LTV. Invest in tax efficient high yield risk adjusted debt investment strategies with goodman capital@whitecoatinvestor.com all right, welcome back to the podcast. If you're interested in real estate opportunities, you probably ought to sign up for our newsletter for our real estate group. You can sign up for that@whitecoatinvestor.com reopportunities and that gets you not only emails that tell you about these sorts of investing opportunities, but also educational emails just to help teach you about real estate investing. No cost to that. Yeah, you can take our real estate course and there's a charge for that, but that's not required to be part of this group. You can just sign up for it and you get the emails. There's no commitment. You can unsubscribe at any time, just like anything else we send you. But we'd love to have you in the group and we know that those who are interested in these sorts of investments appreciate what they're getting from it. All right, we got a great interview today from somebody who also invests in real estate, but that's not the main thing we're talking about on this interview. She has done a fantastic job together with her husband at becoming essentially financially independent, Lean Fire, and really getting her husband out of the workforce at this point. Stick around afterward though, because we're going to talk a little bit more about fire, Lean Fire, the pre retirement benefits of fire, what happens after financial independence, et cetera. So stick around. Our guest today on the Milestones to Millionaire podcast is Beth. Beth, welcome to the podcast.
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Thank you very much.
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Tell us a little bit about yourself, what you do for a living, how far you are out of training, what part of the country you live in.
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So I'm a primary care physician, internal medicine and pediatrics trained. I am 13 years out of residency and I Live in the mid Atlantic in one of the Californias of the East Coast.
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Expensive place.
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Expensive place.
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Yeah. Very cool. Okay, well, you've accomplished a lot. You've been very successful, financially speaking. I'm curious how you're going to answer this question, though. Tell us what milestone we're celebrating with you today.
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So we're celebrating a somewhat unique one in that we are celebrating that my husband just retired from the military and we are in a financial position where he no longer has to work.
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B
Yeah, very cool. And maybe even more of a financial position than that, given some of the details, which we're going to dive into here. All right, so tell us a little bit about. He's been in the military. You've been a doc, not in the military, I assume.
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Correct. Civilian the whole time?
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Yeah. Okay, so give us a sense of what your income's looked like over the last. I guess if he's retiring, he's been in for 20, probably. Huh.
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He's been in for 26 years, went to a service academy, and then did a full career in the military. So one of the reasons I signed up for the milestones to Millionaire is I felt like there were a bunch of episodes where people had kind of come out making $800,000 and were very successful. And we've kind of been on the lower end of physician household earners. So in the last couple of years, I did change jobs. For the last year or two, we've been up in 380, 390 range. But before this, we'd always made under 300. For both of us, growth per year.
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B
Okay. Under 300 total. Okay. And where are you at now? Give us a sense of where you're at. Net worth wise, assets wise, debt wise, et cetera.
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A
Yeah. So we have. We have no debt. We have in investable assets and cash, about 1.9 million. I kind of updated our spreadsheets a little bit this weekend while preparing for the show. We have about a million dollars in paid off real estate, both our primary home and a rental property. And we have no debt, mortgage or otherwise.
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Okay, well, that's a super boring, simple financial life.
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Sorry.
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Congratulations on being multimillionaires. But you demonstrate that it doesn't have to be complicated to do that. Right. You got one rental property, you got some retirement accounts, you got some investments. You have no debt. Tell us why you don't have any debt.
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So we paid off. I did have a little bit of student loans, so we paid that off a couple of years after we got married about five Years out of training for me. My husband is a little more debt averse than I am. But we, we kind of go back and forth knowing he is retired military and has a pension. We want to be able to someday live off of, you know, retirement assets and his pension. And so part of our impetus was to pay debt off early so we didn't have a mortgage as he was going into retirement. And he has just always been much more debt averse. Wants to get things paid off as quickly as possible and keep expenses low. I tend to be a little less debt averse in terms of carrying a mortgage mortgage on a rental property. But it's also great not to have any debt and to have kind of retired all of our recurring expenses has really opened up a lot of flexibility for us.
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B
Yeah, I imagine you have a lot of flexibility. I mean, you're multimillionaires. He's got a pension already coming in. At this point you're probably in some sort of a fire state.
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A
Yes, we are. And we were talking about that this weekend that I actually am in a job that I really like. I'm in a small private practice. It's a good group. I love my patients and I really like working right now. But if we were in a situation where I could no longer work or decided that it wasn't for me, we're in a situation where we'd be able to live very comfortably on what is coming in from his pension and our savings.
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Yeah, pretty awesome. You're basically free to do whatever you want. And in your case, it sounds like you've chosen to continue to work, which is obviously going to bolster you financially. You'll be very surprised how quickly this nest egg grows when you're not withdrawing from it and actually still adding to it every year. And it won't be long before you start going, well, what are we going to do with this money? Right. How are we going to give it away? How are we going to increase spending? What can we spend on that actually brings us more happiness? You'll be dealing with all these wonderful financial independence questions that all of us deal with once we get to that point, especially if we're still working. But I got to tell you, there's a problem you're going to deal with. Right? It's this existential crisis I've been dealing with for the last seven years of what I'm going to do with the rest of my life.
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Well, Jim, we have a boat.
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That'Ll eat up some of it for sure. For sure. That'll eat up some of it.
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And we bought it in cash. It was something my husband had been scrimping and saving for for years. And he sailed in college and has always loved being out at sea. And so it was something he's always wanted to do. And we found the boat and I said, well, this one actually is priced pretty reasonably. Maybe we should think about buying it. He didn't know how to say no to that.
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So it's a sailboat. What is it?
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It's a sailboat.
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So you gonna take it down to the Caribbean or what?
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Hopefully that's the someday plan. So part of his retirement enterprise is the boat's about 40 years old, so she needs quite a bit of work before she's ready to go. For real?
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Yeah. But that is so fun to see. The fruits of all the work and all the effort and all the discipline you put in now for decades paying off. You have all these options now. Tell us about you guys. Sounds like you got on the same financial page relatively early in your marriage. Tell us about those first conversations if you can remember them.
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Yeah, I mean we. Oh gosh, we started dating probably close to 15 years ago. And at that time I was recently out of training in my first attending job, still had some student debt, which I think made him pretty nervous. But he married me anyway. And we have, you know, largely been on. On the same page, especially those big priorities in terms of paying ourselves first, maxing out all of our retirement vehicles and really kind of working towards the future. Neither of us are super big spenders. I'm definitely more of a spender than he is, but I also think we balance out each other really well.
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Yeah. Now you've done this on what's not necessarily a super high income, and you've done it in a high cost of living area. Tell us about how being in that high cost of living area affected your decisions over the years.
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Yeah, I mean, I think and one of the things that even in the high cost of living area, I was in a community health center and academic center, so on the kind of the lower paid side of physician salaries, even in our area. So it's always been about living below our means. We don't exactly live like residents any longer, but we did for quite a long time. And we try to prioritize experiences over stuff. And then I think one of the other issues especially that's made it possible for us if we don't have children. So that certainly cuts down on our expenses quite a bit compared to peers I have here who have kids in school and sports. It's a big amount of their income that goes to the kids.
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B
Yeah. Tell us about your housing decision. This is a big topic. People who are coming out of training now in the midst of this housing crisis. How much is your house worth compared to the median house in your area?
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Oh, I don't know what the median house in our area is, but we live in a. We actually live in a condo that we bought when we moved back to the area right before I started a new job. And we actually look back at that decision and say if we were to do it over again, we probably would have bought something different. But we bought it intentionally as we'd like to turn it into another rental property down the road. So we bought something looking at it specifically as a property that we'd rent to. There's a lot of military in the area, so. And there are a lot of military in our neighborhood, so down the road. Our intention is to make that a rental, but we've been a little tight on space, thinking we'd be there for two to three years before converting it into a rental property. We've now been there for seven. So if we had to do it over again, we probably would have purchased something that was a little more long term. View in mind. And living in one of the California's housing prices here are absolutely insane. You're looking at close to a million dollars for a, you know, two to 3,000 square foot home. So one of the things we've held off on is kind of buying our forever house. A fair amount of our assets right now are in cash with the idea that at some point we will use that to purchase a house with either all in cash or without much of a mortgage. But we're still a few years down the road for that because we just can't stomach buying in this California market knowing that at someday we may retire to a lower cost of living location.
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Yeah. Or just live on the boat.
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Or just live on the boat. It's 28ft long, Jim.
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Very cool. Very cool. All right. It's maybe a little small for something to live on full time, but it does sound like a lot of fun. Yeah, I think about that. My boat's 24ft long, so 28 is not much to live on for. Sure. I'll give you that. All right, well, very cool. Congratulations to you on your success. You two should be very proud of yourselves and we're very appreciative of you coming on the Milestones podcast to tell us about it. What tips do you have for listeners? If they're coming out of training now, they want to be like you by mid career or late career or whatever. What would you tell them to do so they can have options like you do?
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I think getting the big things right, we've kept our costs low. We really aggressively worked to pay off debt and live below our means. So I think if you get those kind of big things right, you have a lot of room to live a really great life and to make mistakes and do things that seem a little bit silly, like buy a boat rather than continue to contribute to taxable savings. But it's been really great. We have a wonderful time and really enjoy the time we have together and the time we have out exploring the Chesapeake on the boat. So I think as long as you get those big things right, you can use the rest of your income to lead a great life. The other thing I would have done differently is I wish I would have kept better track of things over time. I think we cleared the million mark for investable assets in 2023, but we don't actually remember when we did it. I remember we, you know, had a nice dinner and had a bottle of champagne. But I wish we would have kind of kept better track of these milestones over time. I used one of the, like, financial aggregator sites when I was in residency and paying off my student debt, which was mint.com and it's out of business now. So, like, all of that tracking is gone. So I wish I would have done something better with an Excel spreadsheet on my own laptop to just track kind of our progress over time, because it really does go fast, and I think it would have been neat to look back and see how far we've come.
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Yeah. When you're doing it right, it goes fast. It doesn't necessarily go fast for everybody, though. But you're right, tracking it does seem to make it go faster. Just the simple act of tracking it. And it is fun to look back and laugh. You know, I was writing a blog post this morning and I mentioned my big fear when I was going to medical school is that I do $75,000 when I came out. Right. And it just seems so silly looking back, that it's fun to be able to talk about some of those things.
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Yeah. And I might actually put in just a plug. So I did do National Health Service Corps for medical school and then worked in a community health center for three years as a scholar. So I did have a much lower loan burden than many students do. Currently, but it's still certainly, you know, I had undergrad debt, I had medical school debt, and you know, looking back and thinking, you know, what a hole I was in when I finished training and, you know, it was $70,000 in the red. It's really just kind of shows how slow, steady progress and being really boring about it really leads to success.
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Yeah. Did you have a good experience with the National Health Service Corps?
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I did. I did it as a first. I signed up as a first year medical student. So I had no idea what I was getting into. I had no idea if I would actually like primary care. And I do, though the placement process and finding a job was a lot harder and a lot more stressful than, than I had anticipated. But I ended up working in an urban federally qualified health center, which was really hard, but also a really good place to learn how to take good care of patients and to learn how to do good primary care and meeting people where they are and, and you know, you often felt like you were, you know, two steps forward, three steps back in terms of making a difference. But I am glad that I did it and I think that it's something that was worth doing. If I knew what I was getting myself into as a first year med student, I don't know that I would go back and do it again.
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What if you were staring at a 5 or 6 or $700,000 student loan burden? Would you maybe put it back on the table and consider it?
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Yeah, I'd probably do it. It's like looking at today's tuition prices, I think that it's a. I think it's a reasonable path. And the National Health Service Corps now has an option for students who are in their fourth year. And I think knowing if you really want to do primary care, because if you don't, I think you see a lot of, you know, burnout physicians in primary care who perhaps would have been better served by going into a specialty. But if you really are interested in primary care, I think it's a great option. If you're interested in pursuing a specialty, emergency medicine, I think the military or some of the other contract options are probably a better fit.
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Yeah, there's definitely a lot of contract options out there, but I think the big thing you have to decide is do I want to do this thing rather than doing it primarily for the money. I think that's where people end up being unhappy with their MD, PhD or their HPSP or their NHSC or their IHS contract or whatever else they've signed if they're interested in doing that thing primarily, it works out great. If they're doing it mostly for the money, I see a lot of regrets, for sure.
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Yeah.
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Well, Beth, thanks so much for being so successful, number one, so you could tell us about your success. But number two, being willing to tell us about it, inspire somebody else to do the same. Congratulations to both of you on your success and may it continue going forward. Great.
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Thank you. We will see you at WCICON 26 in March.
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Looking forward to it. Hopefully we'll see a lot more people there as well. So if you're hearing this, there are still available slots to come to wcicon. Hopefully they're still available by the time this runs in November, but I suspect they will be. It's going to be a great time down there.
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Great. Thank you so much, Jim, and thanks for all that you and the WCI team do.
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All right. I hope that was helpful. It's fun talking to Beth. Beth has followed me for a long time, actually, since before I started the White Coat Investor. A lot of you may not know this. I'm not sure Megan knew this when we were talking after we stopped the recording, but I've been doing White Coat Investor stuff for five years or so before the White Coat Investor was started. I just did it on forums. I did it in places like the Student Doctor Network forum and the Bogleheads forum and the Thermo Forum. So I was answering doctor questions about their finances for a long time before starting wci, which kind of explains the tone from those early blog posts that it was already, hey, this is something I've done. I can help you do it too, et cetera, rather than come along with me. That kind of explains that for those who may not understand why I started popped up with that tone in 2011 when I started the White Coat Investor. But that's the reason why now I promised you at the beginning, we're going to talk a little bit about financial independence. Financial independence. The basics of it are pretty easy to understand, but I had a really fun experience this last week actually teaching it to one of my siblings that didn't know any of this stuff, which I'm a little embarrassed about that. You know, my sibling didn't know this stuff because it means I didn't teach it to him yet. But you know what? When the student is ready, the teacher will appear. But the basics are this, right? You got to figure out how much you spend, which my sibling didn't know. You got to figure out how much you have, right? Which tells you where you're starting from. And then you can figure out the gap between what you need to be financially independent and what you currently have. The basic calculation is you take what you spend and you multiply it by 25. Okay? So if you spend $50,000 a year, you need 1 million, 25 million dollars. If you spend $100,000 a year, you need 2.5 million dollars. If you spend $200,000 a year, you need 5 million dollars. Okay? That's the basic calculation. That's what retirement is. It's a number, it's not a date. Right? And so if you have $1 million and you need 4 million, well, that gives you a sense of how long it's going to take. If you look at what you're spending and how much that's. Or what you're investing each year and how much that's earning and how much you have right now, you can calculate out how long it is until you reach financial independence. And when people first do this, they typically aim for something that's often called lean fire, which is like the bare minimum for you to meet what you have to spend on your life. Right? So maybe your lean fire number is 2.5 million or something like that. You're like 2.5 million. Okay, well, we could take $100,000 a year out of that, and that would cover the basics. We could pay our taxes, we could pay our property taxes, we could pay our insurance, and we could eat and we could go on a couple of road trips a year and we're good. Right, but what happens when people get near that area? Right? Well, a couple of things happen. Number one, they realize that the money is starting to have more power than the job because it can earn, it can double in size every seven to 10 years, and the return on it kind of starts mattering more than the amount of money you're putting into contributions. So people make changes in their life that they've been wanting to make. What that often looks like is going part time, right? Maybe you're dropping call, maybe you're not doing procedures you don't like. Maybe you take every Wednesday afternoon off and go golfing, whatever, whatever it looks like. But people make changes in their life. And the beautiful thing about financial independence is you don't have to be all the way there to make these changes, right? You don't have to be financially independent before you can go part time. At a certain point, you get to what's called coast fire, which means you don't have to Add anything to your portfolio, and it's still going to get you to your financial independence number. And you can either, you know, work less and earn less, or you can just spend more in the meantime, but it allows you to quit putting so much money toward your retirement goals. So even before you get to financial independence, there are benefits of taking care of your finances. But what typically happens once people hit their FI number, you know, it's usually a lean FI number is they go, you know, I'd actually be a little happier if I could spend more money. And so they bump up their number a little bit. They're like, yeah, two and a half million. I could live on that. You know, something bad happens, that's a number. I can cancel my disability insurance, I can cancel my life insurance, whatever, but I'd really rather spend $150,000 a year instead of $100,000 a year. And that's going to take some more money, right? So they decide that they're going to keep going for a little while. They're going to keep working and saving and investing and waiting for their money to earn money, reinvesting that along the way. And that's pretty typical. When we became financially independent in 2018 or so, we looked at a few things we'd like to buy and maybe some ways in which we'd like to increase our lifestyle. Katie loves travel. She love travel. I don't love it quite as much as she does. I do think it's fun. I do go on several trips a year, but she loves it. I mean, she'd go like every month if she could. She thinks it's awesome. So we built in more travel into our lives, more travel into how much we needed to really be financially independent at our desired level. So that was a couple of more years before we kind of got to that point. And then when you're truly financially independent, you can't think of anything else you'd spend money on. If you have it, you start looking around and seeing how you can change the world. And maybe that's leaving money to your kids. Maybe that's figuring out ways to improve their lives. Maybe it's helping them with down payments on their houses or something like that. Maybe it's giving money away to extended family members or just friends and people in need. Maybe it's supporting charities. Maybe it's building some sort of a legacy, right? There's all these things you can do if you continue to work after financial independence. And because the goal is not to be the richest person in the graveyard, right? The goal is not to, you know, you're not competing against anybody else here. You don't need to be wealthier than your neighbor or the guy at the cocktail party or your partners at work or whatever. That's not the point. The point is that this is a single player game. It's you against your goals. And if you don't have goals that you know require all the money you have, maybe it's time to pick a few more goals. And they're probably likely giving goals. And most of us are not nearly as good at giving as we are at some of the other financial activities in our lives like earning and saving, investing and spending. But you know what? It's an important one to learn how to do well because it makes a difference. And you really can change some other people's lives for the better by doing so. Okay, Our sponsor for today's episode is Goodman Capital, leading real estate investment firm focused on asset backed private lending in prime markets across the greater New York metro area. Since 1987, Goodman has built a cycle tested platform with more than 850 million plus enclosed transactions and over a thousand investors serve including physicians and medical professionals. Their institutional infrastructure, third party administrators, auditors and counsel ensures transparency and compliance while their focus on senior secured low LTV loans provides strong downside risk protection. Join Goodman Capital and access tax efficient passive monthly income with principal safety@whitecoatinvestor.com Goodman Hope you enjoyed the podcast. If you want to come on it, you can sign up@whitecoatinvestor.com Milestones until our next one, keep your head up, shoulders back. You've got this. The whole community is behind you and here to help and you too will reach these milestones to millionaire.
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The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.