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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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B
Milestones to Millionaire podcast number 265. This podcast is sponsored by Bob Bayani at Protuity. He's an independent provider of disability insurance planning solutions to the medical community in every state and a longtime White Coat Investor sponsor. He specializes in working with residents and fellows early in their careers to set up sound financial and insurance strategies. If you need to review your disability insurance coverage or just need to get this critical insurance in place, contact bob@whitecoatinvestor.com Protuity or you can email infoprotuity.com or you can just pick up your phone and call 973-771-9100. Okay, we're starting a sale starts today. It's a WCI course sale. We're going to give you 20% off for being a podcast listener. All of our online courses. Okay, just got to use code podcast20 when you check out. And from now until March 16th until the next one of these podcasts drops, you will get that discount. You can get that on our no hype real estate investing course, which you very well might want to take after listening to this interview. You can get it on our flagship fire your financial advisor course. We've got a version that's eligible for cme. We've got a full, you know, attending version. We've got the resident version, we've got the student version. Every year we do a continuing financial education course. All of Those, they're all 20% off. Just use podcast 20 when you go to check out. You can go to wcicourses.com and see that. Okay, we have a great interview today. Let's bring them on the line. You know, every now and then we have, you know, we meet a white coat investor that's just been very, very successful. And you know, the people on the white coat investor forum love to hear these stories. They think every white coat investor should be a DECA millionaire eventually. But I don't know that's necessarily the case. But there are a fair number of docs out there who have been very successful despite not necessarily having a super high physician income. There's a lot of different routes they take. Sometimes it's an entrepreneurial route and you'll see that this interviewee did a little bit of that. Sometimes it is a real estate empire that they built. This particular person did a lot of that. Sometimes it's just working hard as a doc, maybe marrying another high income professional like a Doc saving a big chunk of their income. Stuff it into boring old index funds and retirement accounts. This doc did quite a bit of that as well. So let's listen to the story and hear what success looks like. Our guest today on the Milestones to Millionaire podcast is Ashwani. Welcome to the podcast.
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C
Oh, thanks for having me.
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B
Well, let's introduce you a little bit to our audience. Tell us what you do for a living and what part of the country you live in and how far you are out of training.
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C
I am a hospitalist, internal medicine and we live in Hershey, Pennsylvania and I've been out of training since 2009, so almost 17 years this year in July,
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B
certainly mid career by now.
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C
It is a mid career and I'm turning 50 this year.
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B
Congratulations. It's a big milestone. I hit it last year and it's not all happy news, but it is impressive to have lived for half a century.
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C
It is.
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B
You know, let's talk about the milestone we're going to be celebrating with you today. It's really kind of a net worth milestone. Tell us what your net worth is now.
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C
Well, my net worth is I would say a little short of 8 million. So it's not 8 million, but little short, you know, but I never realized that we can reach that level, you know, slowly and unsteadily doing the efforts and listening to your podcast, your Facebook group and others. Wherever I got there, the knowledge and just slowly growing to that level.
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B
Yeah, I mean $8 million is a ton of money. Lots of doctors retire on far less than 8 million.
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C
Right.
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B
When we look at the, at the net worth surveys out there, only something like, what is it? I think it's around a quarter of doctors in their 60s. Right. Not before 50. Only a quarter of doctors in their 60s have a net worth of $5 million plus. And about a quarter of them aren't even millionaires yet in their 60s. So 8 million is smashing it out of the park. That's pretty awesome. So congratulations on that.
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C
Thank you. I didn't know these numbers actually.
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B
So tell us a little bit about what the net worth is made up of. How much assets, how much debt, how is in, you know, traditional investments, how much in real estate investments, how much your home, etc.
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C
Yeah, so I'll say, I mean the retirement accounts, I have a 2.7 million. It's both me and my wife and I have a little bit more like out of retirement accounts investment. So I still consider them as a cash and then a real estate investment. We have a worth of 7 million of property. And that's just my share. It's not with the power partners. You can say that is depending upon the cap rate. And you know, you understand that cap rate thing. I actually own the franchise too. I forgot to mention that. I don't know if you. Have you heard about that. Methanasium is a math tutoring center. So I have that. So I consider that value. So somewhere around 400,000 to 500,000 if I have to sell it right now. So that could be sold at that too. And then rest is a cash. I still have a cash. I consider like whatever is the non retirement accounts as a cash because you can easily liquidate them and then do whatever you want to do. Maybe buy another real estate.
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B
This is pretty fun to look at the end of the story. Now let's hear the story. Take us back 17 years. Bring us back up to now. How did you build this net worth while working as a physician?
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C
Well, to be honest, I came from India here in USA in 2006 and actually left India in 2003 with minimum of only $2,000. And I stayed there for three years. I was lucky that I got some job and then still I was saving there. I had a Z I would say like those 2,000 I got from India was spent within a six months for stay and everything, finding a job, etc. But then I got a job so I saved 10,000. So I came here, started residency in 2006 and 2006 to 2009 completed my internal medicine residency. I was already attracted towards hospitalism week on week off. Pretty good thing. And that gives me plenty of time to think about any other stuff I have to do in life. 2009 we bought our first home. I got married as well in 2008 and my wife was doing residency so we moved from Pennsylvania, Delaware for a couple of years and we bought a home and she wanted to do a fellowship. So we came back here in Pennsylvania and as you were mentioning or everyone says that it's not a good idea to sell a home if you're only living for two years, at least four or five years you have to live it. So I didn't feel it like selling it and coming back to Pennsylvania. So there was a residency there. So I got a year resident. She rented from me and that was the thing started okay, you know, things went really well and then I came over here, you know, my wife was still doing fellowship and again we're in the process. We got our first kid, second kid, so. But then we stayed here forever after residency and her fellowship. And then I bought another small home, 125,000. And that was not building an acute, that was somewhere around 2015 or 14. And then I decided, you know, I have to scale it up. But how? I researched a lot. I talked to people. I was still, I would say, looking for any side gig to see what else I could do. And then I was at my friend's son's birthday party and then we were sitting outside in a boat and then there were six doctors. I said, hey, do you want to join hand together with me? And that's how the journey started. And going into commercial real estate, I would say. And three of them chickened out. They said, oh, we can't do that. You know, we don't have a permission from wife and this and that and three, we stick together. One chickened out with our first deal. I once had chickened out. He was never has done a deal before and he was little afraid another one. So we two of them bought a deal, first deal. And with all the courage and each other's support, okay, that's a lot of money to put that in a commercial. 20%, 25% down. And it was a 1.3 million. We bought a Dollar General, single tenant, national levels. And we did a little bit of research and it was a long term lease. And we said, okay, okay, now's the next step. So then the third one kept on asking, hey, I think I'm ready now. So that was a 2016, we bought our first Dollar General. Then 2018, we bought another deal, another Dollar General and so kind of grew from 1.2, 3. And then we bought this for 1.2 but a little bit more, less risk because it's divided in three. All right, so things were going really well. And then the end of 2019, I saw a medical office building and it was listed at 4.5 million. And we, I said this is a strong building and it's a healthcare, tenants, everything. But we didn't have any money. Hey, this is out of league, we cannot put that much down payment. If you want to think about like a 20% down, 4.5, like at least a million dollars if you think about it. We didn't have any saved up money for that much, but then said it's a solid bidney, we shouldn't just let it go. And then I said to my partners, let's talk to the banks, maybe something they can do. And you know, at that time the interest rate was super low. And then we bought that deal with the bank giving us a 90%. So what they did is 80% building loan and 10% business zone for five years. And with the numbers, it made a sense. So that was our first bigger deal. And then Covid hit, everything changed, you know, and then. But we were still hungry to go more. And again, another birthday party I went to almost an hour away with the friend's wife's friend's 40th birthday party. And then I saw a building is for sale. And I told my wife, let me just drive by. I drove by. It's a pretty strong strip mall. And with the national level tenant, Aspen dental, buffalo, wide wings, sports clips, Mohs, Southwest. I said, but where would we get the money? And it was listed for 7.3 million. And that was another big deal, you know, like, oh, wow, that's a. Where would we get the money? We have already invested. But then again, we talked to multiple banks. We kept on talking, hey, give us some money, give us some money. And then we got a similar deal, 80% loan. And then they couldn't agree to 10%, but they agreed for 5% extra. So we got it at 85%. So that's how we grew. And then we kept on getting this letter. Hey, we'll do this cost segregation. What is this? As I said, I have no experience. And then I kind of googled it, learned it. Oh, this is a legal thing. We can do cost segregation. And that's how we found that. Okay. You know, there's a. Cost segregation is the real key for real estate. And then next step we found on 1031. Wow, what is this 1031 now? So we sold our first property, 2016, in 2021, and did the 1030 double that value. And then in 2022, with the medical building we bought, we sold that. Although we got a pretty bad hit by Covid because everyone went to work from home. So that building was a medical office, a financial office, an attorney. They all started leaving and the value was not that great. So we came out with a similar price. But we were able to exchange with the 1031 with the Warehouse, with the national level tenant. So that's how the journey started. And we're still in a process. Now we are doing 1031. So now the third property is on the list. So that's how you know the benefit of a tax harvesting. Because I'll tell you another story. In 2008 and 2009, I was investing in a stock. And then I bought this rite Aid. It was Only for a dollar. I bought for 30,000 and it became $4. I sold it. Then I found that oh my God, that's a lot of tax money because it's a short term tax game. And then I realized that hey, you need to find out where you can invest and get some tax harvesting or maybe tax defer or something like that. And that's where we kind of grew into this.
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B
Yeah, pretty cool. Okay, that explains the real estate journey for sure. We gotta go back. You mentioned a Mathnasium, right? Math Nasium franchise. Tell us the story about the Math Nasium franchise.
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C
You know, as I said that I was looking for some side gigs. Whenever is a week off. I was looking for opportunity. I used to go out, talk to people, talk to various agents or maybe franchise. Just kind of keep exploring. My goal was just to keep exploring, find out what's out there and what I can do. And then we used to take my son Matanesian, he's a pretty sharp kid to a Met Tunisian. Which is almost half an hour. We used to sit there, go for half an hour, come back half an hour, one hour session, two hours were spent. And then I realized that why not explore that to bring it to my own county. So that's how the journey started that then I went to you know, the discovery thing and everything. I went to Los Angeles to their headquarters and found that it's a very low key investment. I don't have to put a lot of money. And so I started it and Matt is the thing, you know, everyone needs that in a life. You know, whatever you're teaching is as a financial literacy is all involves the math.
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B
So I'm curious, what kind of returns have you seen off the Math Nasium franchise investment?
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C
Math Nasium does not give me that much of a return but it has given me a lot of opportunity. How to market yourself in a small business Cuke books or you know, employee how to manage everything. So it's kind of a mini company, I would say where I learned so much. Being a doctor, you don't know anything. You just go to the as a myself I was just going to the hospital is that says see the patient, put the notes in, discharge somebody and that's it. And then some compliance. I had no experience so Methnesium I still have it and then it's given me a plenty of opportunity to interact with the, you know, how the social media marketing works. So gave me a plenty of experience.
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B
Okay, so are you still seeing patients?
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C
I am.
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B
How much do you work still?
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C
I am 0.75, but my job is 0.5. I'm a physician advisor. I don't know have you heard about this term or not? And I am for utilization management. So I call the insurance director for peer to peer and then 0.25, I'm a hospitalist. So I'm still working. Yes.
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B
I mean this is like the classic American dream story, right? Immigrant comes to the US becomes a gazillionaire.
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C
Right.
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B
It's pretty awesome. I mean, how proud are you of yourself? How proud of you as your family?
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C
Oh, absolutely. I am proud of that. You know, I have to tell you a story. Where I came from in India, my father really worked hard. We are three brothers and my father used to live in just the one room, just the one room, family of five. And then there was only a couple of beds. And although he worked hard, he became a lawyer eventually. But the situation was like that. And then even my brother, the older brother, he only had a goal. Okay, I don't know what I will do. I maybe do a clerical job or something. But he became a doctor. He's a radiologist in India and he even cracked the highest exam in India called UPSC where you straight away go into the federal level of jobs. So he's pretty solid foundation. He went into that farm. So we came from very like a low key background.
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B
Yeah, it's pretty cool. Pretty cool. Okay, well there's somebody out there that's like you, maybe they're in residency right now, you know, some sort of international medical graduate. Their net worth is zero or certainly rounds there and they want to do what you have done. What's the one piece of advice you would give them if you had two minutes to talk to them?
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C
Yeah, I would say so. Don't stop dreaming. You know, there's always an opportunity. And when you talk about finances and you should everything write it down, you know, I have a $0. I will still write it down on my Excel sheet. What do I have, how do I spend these things and what's coming in, what's going on? And that's. I didn't live in a frugal way or anything. My cars were decent, I didn't come up. One time I even bought a luxury car. And at that time I was not able to afford it. But still, you know, that's the advice. You keep dreaming and there's always an opportunity to talk to people.
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B
Well, congratulations. It's pretty awesome what you've accomplished. You should be proud of yourself. We're proud of you. And thank you for being willing to come on the podcast and share your story with others.
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C
It was my pleasure. Thank you.
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B
Okay. I hope you enjoyed that. I didn't ask a lot of questions. I just kind of wanted to hear the story and I thought it was a very interesting story. I mean, it really is an American dream. And there are lots of docs from other countries, from India in particular. We've all worked alongside them shoulder to shoulder. And that immigrant mentality is something that I would love to be able to teach to my kids, so much so that we're going to move to Canada. I'm just kidding. But you wish you could just to instill that kind of immigrant work ethic and that immigrant dream in your kids. So they also want to work hard and take some risks and just view the world as their oyster. But it's pretty awesome. Awesome to really see somebody that's done that that, you know, is basically my age, could have been working alongside me, you know, admitting the patients I was calling him about all along the way. And meanwhile he was doing this on the side. You can do it too. If you're interested. You can learn this stuff I mentioned at the beginning of the podcast. We're having a sale on our on our online courses use that code podcast 20 this week you can take our no Hype Real estate investing course and you won't be on your third or fourth property. Before you learn what a 1031 exchange is or before you learn what a cost segreg study is, we'll teach you that stuff all up front and hopefully grease the skids on your pathway to building your own direct real estate investing empire.
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A
Hello, my name is Tyler Scott with White Coat Planning and Jim has asked me to come talk today about Health Savings Accounts, or HSAs. HSAs are a beloved account by personal finance enthusiasts because of their incredible tax efficiency and tremendous flexibility. Before we get into those details, let's zoom out and talk about the two major categories of health insurance plans offered by most employers and available in the marketplace. There are more than two types of health insurance plans. There's PPOs, HMOs, EPOs, point of service plans, high deductible health plans, and more. For purposes of this conversation, we're going to talk about high deductible health plans and then non high deductible health plans. For simplicity, I'll refer to the basket of non high deductible health plans as PPO plans. Most of us are very familiar with how PPO plans work. Your kid gets Strep throat. You go to the pediatrician, you pay the $30 copay, the insurance pays the rest. This is the cadence most Americans are accustomed to, and it's easy to understand. It's easy to plan for. A high deductible health plan works really differently. These plans offer lower premiums in exchange for higher out of pocket costs. The insurance doesn't pay for anything until you've reached the high deductible, which is often several thousand dollars. So now when the kid gets strep throat, we do not pay a $30 copay at the pediatrician's office. We pay the entire $300 office visit. This is not the cadence most Americans are familiar with, and it can feel confusing and be difficult to plan for. For this reason, high deductible health plans, or HDHPs for short, are unfortunately underutilized in our country. I say unfortunately because HDHPs represent an opportunity for many of us to save overall on health care and build significant wealth over time. The primary way they help save on overall costs is because the monthly premiums are typically meaningfully lower than the premiums on the PPO plans. And they should be. If you're paying $300 for the strep throat visit instead of 30, you're saving the insurance company a lot of money, and thus it makes sense for the insurance company to charge you less for that coverage. For an average family of four, I usually see that the annual high deductible premiums are $1,000 to $3,000 less than the PPO premiums. This annual savings on premiums is critical to keep in mind when you're paying the $300 pediatrician bill instead of the $30 copay. It can feel shocking at first to pay the full cost of the visit, but you have to remember that you're already saving several thousand dollars just by having lower premiums. Now, having lower premiums is nice, but the real magic with a high deductible health plan happens because the HDHP is the key that unlocks the glorious door of the health savings account. You must be enrolled in a high deductible health plan and exclusively covered by one to save into an hsa. Congress has set up a system that allows us to use pre tax money to pay for our healthcare costs under both the PPO and HDHP plans. For the PPO plans, we can use a system or concept called a flexible spending account or fsa. With an fsa, your employer sets some money aside from each paycheck into this flexible spending account so that you can use it to Pay for your $30 co pays, prescriptions, any additional medical, dental or vision costs during the year. You often get a special FSA debit card that you can use to directly pay for these expenses. This is great because anytime you can pay for things with pre tax money, you're getting a discount equal to your marginal tax rate, which can be 40 or 50% for many high earners. The downside of an FSA is that it is use it or lose it money. If you set aside $2500 for the year and only spend 1500, you lose that thousand dollars that you didn't end up using. That's why you see people sometimes at Costco in December with carts full of Contact Solution and Metamucil. They're trying to use their FSA money on qualified medical supplies before the money evaporates at the end of the year. With a high deductible health plan, the way to use pre tax money to cover qualified health care expenses is with an hsa. It's similar to the FSA we just discussed, but with some incredibly meaningful differences. The similarities are that this is also typically funded by payroll withholdings in a separate account. A debit card is also often issued to you so you can pay for the $300 pediatrician visit with pre tax money. That's where the similarities end. Now let's talk about the differences. A health savings account is a triple tax protected account. What do I mean by triple tax protected? The first layer of tax protection is that the amount you contribute to the HSA lowers your taxable income each year and thus lowers your tax Bill accordingly. In 2026, the maximum you can contribute if more than one family member is covered by the high deductible health plan is $8,750. The limit if only one person is covered is essentially half that. For someone who is in the 32% tax bracket at the federal level and 8% tax bracket at the state level. That means their combined marginal tax rate is 40%. So if they contribute $8,750 to their HSA, they save $3,400 on their taxes every year. This is also critical to remember when you're paying the $300 strep throat bill, not only did you save a couple thousand dollars on your premiums, you saved another couple thousand dollars on taxes. For most high earning families, using an HSA in this way saves them between $2,000 and $5,000 a year due to lower premiums and reduced Taxes. That's a pretty big head start each year when it comes to reducing your overall healthcare cost further because the premiums are cheaper for your employer as well. In hopes of enticing you to use the hsa, many employers will make a contribution to your HSA on your behalf. It's not uncommon for employers to chip in 500, $1,000 or $2,000 to your HSA. That is free money, just like your 401 matches free money. Your HSA match is money you are leaving on the table if you do not opt to take it. Keep in mind that the annual contribution limit to the HSA is the combination of both your and your employer's contributions. So if your employer puts in $1,000 in 2026 and you put in the other $7,750 to hit the overall 8,750 limit, that's the combined total. The second layer of tax protection is that this is not use it or lose it money. This money is yours forever, even if you don't spend it during the year, even if you leave the employer, even if you opt out of a high deductible health plan in the future, no December Costco shopping spree is needed. The money is yours and you can invest it within the HSA in stock and bond index funds just like you would any other investment account. The growth on those investments each year is tax free. You do not owe any tax as the investments grow or as it kicks off dividends. Tax protection number three is that when the money is withdrawn and used for qualified medical expenses, there is no tax due on it then either. This is the only money in America that routinely passes from ordinary income all the way around to expenses with no tax due. Now, the way this money is meant to be used is that you go to the pediatrician. The cost is 300 bucks. You're meant to whip out your HSA debit card and pay the bill. And there is nothing inherently wrong with that idea. But I don't want you to use the HSA that way. I want you to cut up and get rid of the debit card. That's because the tax free nature of this account is so mathematically profound that we don't want you pulling money out of the account when the healthcare expenses arise. We want this HSA to benefit from as much compound growth as possible for as long as possible. If you can start maxing out an HSA every year in your 20s, invest the money wisely. Do not take the money out of the account during your career. Then you can have well over a million dollars in your HSA by the time you're 65. Now you have a completely tax free way to pay for what is often the highest expense for retirees, which is healthcare, including Medicare premiums. This can meaningfully change the time when you reach financial independence. So if that's not sounding awesome enough already. Well, wait, there's more I mentioned. These accounts are the darling of personal finance enthusiasts, both because of their tax efficiency, but also because of their versatility and flexibility. To understand what I mean by that, we must first outline a few rules about HSAs. Most importantly, if you take money out of an HSA prior to age 65 for non qualified expenses, you must pay ordinary income taxes on the withdrawal and there's an additional 20% penalty. The IRS wants to discourage you from buying a boat at age 55 with your HSA money. But one of the really cool things about an HSA is that after age 65, that 20% penalty goes away. If you're healthier than expected in retirement and don't need all that money for health care, you can take the money out and buy a boat if you want to. And there's no penalty for that. The withdrawal is still subject to taxation, just like a 401k would be, but the 20% penalty is gone. This is an incredible benefit and why Jim has been known to call the HSA a quote, stealth ira. It's really just another retirement account with better tax treatment when used for health care. Now if you really want to optimize, you can make sure future withdrawals are tax free and penalty free at any age. We call this the save the receipts strategy. The way this works is when you pay for out of pocket medical expenses over the years not using your HSA money, you save the receipts as you go. I personally take a photo with my phone or I often ask for a email receipt that I can take a screenshot of or save on my computer. Because paper receipts can degrade over time. So it's nice to save these digitally. Let's say that over 10 or 20 years you have $30,000 in medical and dental expenses. I'm going to get halfway there from just putting my kids in braces over the next few years. The reason to do this is that anytime in the future you can reimburse yourself for past medical expenses using your hsa. That reimbursement is tax free and penalty free at any age. So if you are 55, you can buy a $30,000 boat using your HSA dollars because you are simply reimbursing yourself for $30,000 of past medical expenses as documented in the receipts you have saved prior to age 65. This saves you both the tax and the penalty. After age 65 it's saving you on the tax that would have been owed on the non qualified withdrawal. Further, if your adult child is no longer your dependent on your tax return but is still on your high deductible health plan, they can make their own separate family contribution and you can even give them the money to do it if they don't have the 8,700 bucks to make the contribution. If you do that for them from age 20 till age 26 when they get kicked off your health insurance and they invest the money wisely and don't touch it, just those five or six years of contributions will lead to a million dollar HSA by the time they're in their mid-60s. So that's the story with HSAs. They are pretty cool. Give strong consideration to one if you have access to one. High deductible health plans are not scary. They are still real health insurance you have out of pocket maximum similar to PPO plans. So it's not like you're going to have to pay $100,000 if you're in a car accident or get cancer. They have the same protections as all other plans under the Affordable Care Act. You pay a little more upfront at the doctor's office in exchange for lower premiums, lower taxes, tax free withdrawals that can be used for anything if you combine all these techniques we just discussed and that's a really good deal for most high earners.
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B
This podcast was sponsored by Bob Baiani at Protuity. One listener sent us this review. Bob has been absolutely terrific to work with. He's always quickly and clearly communicated with me by both email and telephone, with responses to my inquiries usually coming the same day. I have somewhat of a unique situation and Bob has been able to help explain the implications and underwriting process in a clear and professional manner. Contact Bob by calling 973-771-9100, by emailing infoprotuity.com or by going to whitecoatinvestor.com
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C
all
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B
right, we've come to the end of another great podcast. If you're interested in being on it, you can sign up whitecoatinvestor.com milestones. Until then, keep your head up, shoulders back. You've got this. We're all here to help you here in the white coat investor community. See you next time on the podcast.
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C
The White Coat Investor Podcast is for your entertainment and information only and should
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not be considered financial, legal, tax or investment advice. Investing involves risk, including the possible loss of principal. You should consult the appropriate professional for specific advice relating to your situation.