Pre-Financial Independence

38: Pre-Financial Independence

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Pre-Financial IndependenceDo you wish you could work a little bit less or go part-time, but worry about not being able to retire if you do so? This is one of the most common things I hear from the clients that I work with, and I find that what most people don't know is that they can actually cut back a lot sooner than they think.

You might think your that retirement accounts must reach a magical number of financial independence to do so. There are many rules and calculations that go into reaching this number so that you don't run out of money in retirement, but I want to offer today that you don't have to wait until you get to that number to start cutting back. 

Join me this week as I introduce you to the concept of pre-financial independence, and share why I believe it's better to focus on figuring out what this number might be for you, rather than trying to get to the mysterious finish line where you can finally quit medicine.

What You'll Learn from this Episode:

  • What the 4% rule means in the context of financial independence. 
  • Why I believe it's better to focus on your pre-financial independence number rather than your financial independence number. 
  • How to calculate your pre-financial independence number.

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Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 38. So in episode 37, I talked about doing a year-end reflection and specifically I said at the end that it's so important to understand where you are so you can kind of figure out where to go next.

And so today, I want to talk about specifically about how to figure out when you can actually not just retire, but to start cutting back. One of the things I hear over and over again from other women physicians is that most of us don't want to quit medicine, but we would all love to work just a little less and go part-time.

And I find that people don't quite see that they actually can cut back a lot sooner than they think. Now, when people think about retirement, they usually think about the stock market in terms of their 401Ks, their Roth IRAs, et cetera.

And most of us think about our retirement accounts as having this or rather we need to reach this magical number, this financial independence number before we can “retire.” And so just to give you a preview and to make sure we're all on the same page, this financial independence number is a number where once you have it, you can stop working completely and just work off your retirement money.

And that is based traditionally on something called the 4% rule. And so what is the 4% rule? Basically a rule saying that for every million dollars you have saved and invested, that will give you $40,000 a year. Now, just recently, I read that they actually think it could be more like 5% and possibly even higher, like 6%, meaning that one million dollars would actually be $50,000 or even $60,000.

What this rule basically says is that this is the amount of money you can withdraw out of your account and you'll likely not run out of money by the time you die. Because that would suck basically to retire and then run out before you die. And so the goal is to not run out of money in retirement. This makes sense, right?

But this 4% rule recently now might be the 5% rule, which is just extra money for everyone. So many of us live by this in terms of well, my number is this. And so I will tell you that for a long time, I would say my number is five million dollars because to me that meant $200,000 a year of income.

Now, this is before taxes obviously, depending on whether this is pre-tax or post-tax money. But for simplicity's sake, that was a number that I had picked. So I think a lot of us kind of live life with this number and we're thinking, okay, once I get this number, then I can retire. But we forget that it's not black and white, it's not all or none.

Meaning you don't have to wait until you get to that number, let's just use five million as an example, to “retire” or do something else. You actually can do it a lot sooner before you reach five million.

Now, in terms of compound interest, it's not linear. Most of the growth can be almost exponential, depending on where you are on the curve. And so like I said earlier, one of the things I hear all the time from other women physicians is they would love to cut back a little bit, but many people feel like they can't because of money.

And so I recently actually had a few clients where they were in this same exact situation and after running their numbers, I was actually able to show them pretty quickly that they can in fact go part-time. And actually I think one of them was technically in a place where they could just quit completely and be fine, which is kind of crazy if you're thinking you can't even retire or cut back at all.

And so it's so important to know what your numbers are and what they mean. And so I think the better number to focus on is not the financial independence number but something that I call the pre-financial independence number or the pre-FI, or pre FI.

And this number is simply the number that you reach, which is before your FI number, where you can actually go part-time and just have a lot more flexibility without affecting your future retirement number goals. So how does that work?

Well, the reason why this works and why this is a thing is because even if you don't add any additional money to your investments, compound interest is still working its magic. Your money's still going to grow even if you don't put money into it.

And usually what happens when people cut back is they don't stop contributing to their retirement. They just contribute less because they're making less. And so one scenario that I think is worth spending time figuring out is at what point were you able to go part time and then what does that part time look like?

Meaning are you going to just cut back a day, and does that mean that you just contribute less to your retirement, but you still have plenty to fund your existing spending? Vacations, et cetera. Or does it mean that you just cover current expenses and no longer contribute to your retirement?

And there's everything in between. You might be like, okay, I'm going to make enough to contribute to or rather to spend on and to live my life, and I'm just going to do enough to get the match, or maybe I'll just do enough to fund a Roth IRA. So you can kind of play with this, and this is how you calculate it.

Because most of us are kind of – we can kind of figure out how to get to our magical number, like five million dollars, how long it's going to take. They're based on what we currently contribute every year. And so the pre-FI, there's no – at least I haven't found a particular calculator for this, so it takes some trial and error.

And so you want to open up your favorite compound interest calculator. I'll link in the show notes to one that I use. It's very simple. It's called the Moneychimp compound interest calculator. And all these calculators are very similar.

You have to put in your current principal and what that means is what you currently have. So I'm going to use the example – you might hear me typing. I'm going to put in $500,000. And then it's going to ask what is your annual addition, how many years to grow, and what is the interest rate.

And for Moneychimp, it also asks when do you want to make the additions. Is it going to be at the beginning of the year or at the end of the year? This affects things slightly. And so if my current principal is $500,000 and let's say my ultimate goal is to have let's use three million dollars, which using the 4% rule means $120,000 or with the 5% rule, it's more like $150,000 a year.

And so let's say I currently am able to put away $25,000 a year and let's say that right now, I'm thinking I would have to work for 20 more years and then the interest rate – this is where I find a lot of people put in a really low number. They're so conservative.

And so this obviously depends on how you are investing your money. That's not something I'm going to talk about in this episode. However, in my humble opinion, this is not advice, I recommend being aggressive. And that's only because even if you do retire, you're going to live for several more decades, and so there's really no reason to be super conservative, which I would consider anything more than 20% bonds.

We are personally invested in 90% stocks and 10% bonds. And so with an aggressive stock portfolio, you can use 10%. I had a client who was using 4% or 6%, which is super low. So obviously it depends on how you're investing it, but these clients were investing pretty aggressively. I think they were actually – some of them were 100% stocks.

And so 10% is actually something you can totally put in. So what I did right now is I put my current principal as $500,000. I'm making annual contributions of $25,000 a year and that could be your 401K and your Roth IRA. I put 20 more years to grow and I put 10%. And that came out to just under five million dollars.

Now, it depends what your goal is. Now, I just said let's try for three million dollars, so clearly, I don't have to work full-time for 20 years to reach three million dollars. So I guess first I need to play around with this a bit and see.

Okay, so when I change it to 15 years, then that would be just under three million dollars. Okay, so I could do that. I could keep working and humming along and working full-time, whatever I'm doing for another 15 more years and I'll get close to three million dollars.

Now, what if I cut back sooner than 15 years? How does that affect things? Remember I said the money keeps growing even if you don't put as much money. So now, this is where you have to do two calculations. You kind of have to do some trial and error.

So what I'm going to do is I do some calculations. I'm going to reduce the number from 15 years to a number before. So I'm going to do five and then 10. And then you got to take that future value and then put it in another calculation. So let me walk you through it step-by-step.

Okay, so what I currently have right now is I have $500,000, adding $25,000 a year, growing at 15 years at 10%. And that comes out to 2.96 million dollars. Now, I want to know how that's going to affect things if I cut back sooner, meaning that I'm going to basically not put as much money towards it.

So let's just try five years. Let's say current principal, $500,000, and annual addition, let's say I only do a Roth IRA, which for this year, the annual limit, contribution limit is $6000. So what I did is $500,000 principal, $6000 annual addition, five years to grow at 10%.

That gives me $845,000 and change. So what I do next is I actually open another window with the same compound interest calculator, and I copy and paste that $845,000 and I put it into a new calculation under current principal. So now the current principal is $845,000 and if you recall, I said I put five years, so now I'm going to put 10 years to grow, which gives me 2.3 million dollars.

So hopefully I haven't lost you, but what I basically did was decrease contributions and plugged it into the calculator to see where I would end up in 15 years. And so with less contributions, I get to 2.3 million versus close to three million if I was doing full contributions.

And so you might be thinking well, we don't get to our goal of three million dollars in 15 years. But you're also working less. And you know, one thing I heard, and this was actually at the White Coat Investor Conference, the first one actually where I remember one of the things Jim Dahle said is it's all about career longevity.

Because doctors are burning out so quickly right now and I think many of us would feel less burnt out if we just worked less. Obviously, there's other factors, but I know that's definitely one contributing factor is if we work less and had more time for ourselves.

And so he was saying how the goal is to figure out how to create a career that you love and can do for a long time. Because at the end of the day, most doctors or many doctors I should say went into medicine because they want to help people and because we love being doctors.

And a lot of us would have an easier time or would feel a lot more fulfilled if we just simply worked a little bit less. So how can you figure out, how can you carve out a way to do that and not affect your future finances? And one way is to simply work a little bit less, still contribute a little bit, still invest the money so that it's growing, versus trying to retire early.

I see a lot of doctors feverishly trying to get to this mysterious finish line where they can just quit medicine and I just think that's the wrong goal. Because remember, in my earlier episode, The Retirement Myth, you're not going to be happier all of a sudden. We think we are, but it's extremely rare that you are because that's just changing the circumstance.

I hope I was clear in this process. I know it was probably a little confusing. But I think the big takeaway point here is don't fall into all or none thinking, thinking you have to work, work, work, put all this money away until you get to a magical amount, and then you can kind of hit the brakes or take a little break.

I always, always tell my clients only you can create the life that you want now. No one's going to do it for you. And if you want to have some more time, now is the time to do it. You can always work more later if you absolutely have to.

And I will say, at least I have found that once you've tasted what it's like to work a little bit less, you will do whatever it takes to protect that free time and it doesn't necessarily mean that you're going to have to get a side hustle, et cetera. But I think sometimes we forget that how resourceful we can be when push comes to shove.

And I think that's one of the beauties of being physicians is that we have so much flexibility about how our work lives can look like. I talked about earlier that you can try locums and you could do per diem work and there's just so many different ways to use our physician abilities to create income for us.

And it doesn't have to look like traditional working at a full-time practice or depending on your specialty. And so I hope this episode has given you something to think about. Maybe you'll run some calculations and re-run your numbers to see where you're actually at because like I said, unless you know where you are, this is like getting on the scale.

How much money do we have? Where are we going if we keep on this path? Do I want a different path? What would I need to do to get there? If you're in my Facebook group, Wealthy Mom Physicians, feel free to post there if you need some help with this calculation and I'll talk to you guys next week.

Hey, if you're a woman physician who is ready to practice medicine on your terms, then you've got to check out my program, Money for Women Physicians. It's part course and part coaching and 100% guaranteed to put more money in your pocket. Go to wealthmmommd.com/money to learn more.

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Reflections and Looking Forward

37: Reflections & Looking Forward

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Reflections and Looking ForwardWe are in the home stretch of 2020, and for me, this time of year means doing some year-end reflection work. I know that this is a time when many people start setting new goals and resolutions for the coming year, but I want to share the importance of first reflecting back on the year ending, and I'm sharing my process so you can do it along with me. 

There is so much valuable information available to us when we take the time to investigate our accomplishments, as well as what maybe didn't go quite as planned. And so today, I'm guiding you in getting really clear about everything you've done, good and bad, so you can take credit and responsibility for all of your results. 

Join me on the podcast this week as I share my three-part, year-end reflection exercise with you. I'm breaking each step down and offering some of my own examples from this year to get you started, and I hope you have as much fun doing this as I do!

What You'll Learn from this Episode:

  • My three-part year-end reflection exercise. 
  • Why it's so important to reflect on what went well this year and what you've created. 
  • My own reflections on what went well for me and what didn't go so well this year. 
  • How beating yourself up for what you didn't accomplish isn't helpful.

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Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 37. Can you believe it's already December and that we're in the home stretch of 2020? This is my favorite time of year to do a year end reflection. This is the time where I ask myself questions such as how are you feeling about how 2020 went for you? Did you grow as a person? Did you accomplish your goals? Did you enjoy being you in 2020?

I find that a lot of people don't do this and they go right into creating new goals or resolutions come January. It's so tempting to skip this, but this is a huge mistake. You're going to miss such important information, and you're also going to bypass really getting clear about what you actually accomplished and taking credit for it.

So what I want to do today is to go over the process that you can do along with me to reflect on 2020 and obviously for any year, but I love doing this at early December or even right in November because this exercise will then help you get clear on what you want to focus on and create next.

So the first thing I want you to do is to start thinking about what your title for 2020 would be. Now, this might seem like a strange thing to do, right? Because at the end of the day, we're all writing our story, our novel. And so 2020 is simply a chapter. So what would the name of that chapter be in the story of your life?

And so I have a hint for you, you get to decide what the title is. And I recommend choosing a title that's positive versus negative. So let me give you an example. I decided on my title chapter to be the year of growth and awareness.

Now, I could have chosen other titles like the year I couldn't get a job, or the year I sat in Zoom meetings all day, or COVID F-ed everything up. And these are all equally true, but they're just not very useful.

Now it's time to reflect on what went well and what you created. It's so important to do this first because it primes our brains for the rest of the reflection process. And so I'm going to say this over and over again, you have to do this step first before jumping on to the other steps that I'll talk about soon.

Because normally, our brains want to immediately focus on what we didn't do, what we didn't accomplish, and that's just sort of normal. So right now we're redirecting our brains to focus on what actually did work, what went well for us, what did we actually create.

Now, before I go on and explain a bit more, I find that it's useful for most people to do this process for different categories of their life. So obviously things like relationships, money, work or business, health, and maybe you want to divide that into mental and physical health, personal development, hobbies, spirituality.

So you really can decide what the categories are, but these are the general categories that most people would agree on in terms of life categories. And so I'm just going to give you some examples from my life about what went well and what I created.

And like I said, there's a dual purpose for doing this first. It's first to redirect our brains to really see what actually happened in terms of what we created and what went well, and number two, it forces you to pause and take a minute to actually take responsibility for what you created versus saying, “Oh yeah, but,” which is kind of where our brains immediately want to go to.

So a few things that I want to mention is one thing I think that went really well is because of the pandemic, I was home and so was Matt and our toddler, although we did send him back to daycare at some point. And Matt and I still like each other and we still like spending time together, so I think that's a huge plus.

Another thing that went well for us and for me is that because of where we live, in New Jersey, my mom and my brother and his wife, we all live within 10 minutes of each other, and this is the first year where that was the case. We never lived super far apart, except for when I was doing my residency in California. But this is really the first time that we all live super close to each other, within 10 minutes.

Because even when I lived in New York City, even though it was right outside of New York City, with traffic, it still would be kind of a hassle. So being in such close proximity really allowed us to spend time together and create a family pod, if you will, and I got to spend a lot more time with them and to really appreciate having them in such close proximity.

Here are a few other things that went well for me. I more than doubled my gross revenue for my business, Wealthy Mom MD. I, or rather we, bought our first two doors for our rental property. I invested in a second syndication deal. We fully funded our health saving accounts, or HSAs and our IRAs, and so forth.

So these are just some examples to kind of get your brain thinking. But like I said, I really want to make sure that you do this part first before moving on to step two. Because step two is, as you probably guessed, now it's time to reflect on what didn't go so well.

And I want to make sure you really take the time to be – I guess objective isn't quite the right word. I just want to make sure that you don't immediately go into beating yourself up for what didn't go so well. Because when you beat yourself up, it's really hard to examine why things didn't work out and to make improvements upon it if you're so busy beating yourself up on it.

And so for this part, I really want you to kind of focus on the facts of what didn't work out so well. And so here are a few of mine. I didn't exercise regularly, I gained five pounds, and I did not fund a donor advise fund, which is a goal that I had created for 2021.

And so far, as of the time of this recording, I have not quite hit my business revenue goal for 2021, which is $500,000. And so you can imagine that if I did this part first, versus starting with what worked, your brain is then focusing on what didn't work and what's wrong, and then it's just really hard for your brain to then focus on what went well.

And so that's why it's so important to do it in this order. And so when I do that first part first and then go into what didn't go so well or what I didn't quite get to, I'm not feeling bad about the fact that I didn't accomplish these goals. And I'm able to just see like yeah, I made these goals, I didn't quite accomplish them, and that's okay.

And then part three is to basically list what did you learn, or what did I learn, and what would you do differently? And this part will really set you up for creating new goals for 2022. And so you can see that step two and three are very similar, and they kind of go hand on hand.

So here are a few things that I learned or what I would do differently. So I had mentioned earlier that I didn't quite fund my donor advise fund and honestly, it's because I didn't really create that as a goal. Well I did, but I didn't create any processes around it to achieve that goal.

I know it sounds kind of silly, but that's just what happened. But now that I see that and I still want to do it in 2022, which I do, now I can be like, oh, I just didn't plan for it and I didn't budget it within my budgeting software, which is YNAB.

So I've actually already gone ahead and sort of budgeted how much I'd have to put aside to fund that donor advise fund. This is just an example, right? Another thing that I learned this year is I learned about racism and I learned – or I should say I'm starting to learn how to be anti-racist.

And I get that this is going to be not a short-term process, but this is something I've decided I want to learn more about and how I can be an ally. So that's just an example of things that I've learned and what I can do differently in the future.

And like I said, I recommend doing this for all areas of your life. Now, when it comes to money, I would say what didn't go so well and what I learned about this year is well, it's so interesting because now I've already told you that I invested in two properties and a syndication, to me I'm like, wow, that's pretty awesome.

But I could have easily said, well, we only bought two doors and we ended up having to pay in cash because we couldn't get a loan and the renovations went over the budget, et cetera. It's so easy to focus on what's not working instead of focusing on what actually is working.

And another way I could beat myself about money is to be like, I didn't fully fund my solo 401K, but I also realize that that's not really a goal of mine anymore, to fully fund that, since we're diverting – or I should say we're focusing on investing in real estate, so it doesn't really make sense for us to do that anymore.

So let me summarize all the steps that I just went over. So I think it's kind of fun to pick a title for the year that you're reflecting on. We're talking about 2020 right now. And so I think of it as this is just a chapter in the story of my life and I get to choose the name of the chapter. So I chose the year of growth and reflection, or actually it was the year of growth and awareness.

Now, the three steps are pretty simple. Basically it's starting with what worked, what went well, and what did you create. And really spend some time on this and don't gloss over it because you'll just miss opportunities for you to really get that you actually did some amazing things this year.

Step two is to reflect on what didn't go so well. Step three is what did you learn and what would you do differently. Now, like I said earlier, step two and three kind of go hand in hand, so it's easier for you to just do it all at the same time. That's totally fine.

Now that you have this information, like I said earlier, now you're going to be so much more informed about what to create next. I honestly don't even like the word goals or resolutions that everyone gets crazy about in January. As you recall in my previous episode where I talked about the retirement myth, there's this myth that once you achieve this magical goal, whatever it is, that you're going to be happy all of a sudden.

Like you'll be happier once you achieve this goal. And I hope you know by now that this is never ever the case. But your brain is always going to think that you will be happier once you get that goal, once you lose the 10 pounds, once you get more money, whatever it is. Once you get the man, once you have the baby.

It's always who you become that makes you happier. The progress you make as you get closer to your goal. But it's actually never accomplishing the goal in itself. Otherwise, all attendings would be living happily ever after and well, that never happened.

So like I said, I really encourage you to do this process in all areas of your life. Really take time to take inventory of things and you can make this process fun. I would highly recommend you do this with your partner if you are in a relationship.

And in previous years, Matt and I would actually go somewhere to do this type of exercise. Obviously, we're not traveling right now, but a year ago, we were in Bora Bora. And so at the end of the day, you can't plan for change or improvement without knowing where you are.

And so this reflection is truly taking inventory. It's getting on the scale. Like if you want to lose weight, you got to get on the scale and you got to see what the numbers are to see how much you want to lose or if you've even accomplished that goal.

And so think of the reflection as where am I right now, where do I want to go, and what are the steps or what do I need to work on next. I hope this was super useful. I hope you do take the time to do this and set yourself up for 2021. I'll see you guys next week.

Hey, if you enjoyed this episode and don't want to miss out on new episodes, please hit the subscribe button on your favorite podcast app. See you next week.

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The Secret to Having Better Relationships

36: The Secret to Having Better Relationships

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The Secret to Having Better RelationshipsSomething I've been exploring more deeply as of late is the topic of relationships. I know this podcast is mainly aimed at discussing wealth and financial education, but I'd argue that having truly high-quality, meaningful relationships is a core element of living a rich life.

If you're anything like me, you've probably heard the term, “It takes two to tango,” in the context of relationships, and you likely believe that it takes two people to create a relationship, or that having a great one entails give and take from each person. But what if this wasn't true? There is one secret that I believe so many people are missing out on that will help you have better relationships, and I'm sharing what that is today.

Listen in this week as I share my definition of what a relationship is and why seeing it in this new way has the potential to guarantee amazing relationships with everyone in your life. I'm inviting you to try one exercise that will guide you in questioning your narratives about the people in your life you may not be fond of at the moment, and I know this is going to be so helpful as we go into the holiday season.

What You'll Learn from this Episode:

  • How having high-quality relationships contributes to living a rich life.
  • Why relationships tie in with the topic of money.
  • What a relationship actually is.
  • Why everyone can have different relationships with one person.
  • The secret to having better relationships.
  • One exercise that will help you change your relationship with anyone.

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Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 36. I hope everyone had an amazing Thanksgiving week/weekend. I know definitely probably didn't look like what it has looked like in the past. We just had a very small dinner with our immediate family. I feel super lucky that we all live within 10 minutes of each other and we've been able to form a family pod, so to speak.

So it was me, my fiancé Matt, Jack, my toddler, my brother and his wife, and my mom and her husband, who's my stepdad. So that's what we did for Thanksgiving. We had the usual. Stuff like turkey, et cetera, and one thing that we do that I think other families probably don't do is we have this infamous Thanksgiving lasagna.

Now, I say infamous because it's not because it's gourmet or particularly awesome. It's just something my brother and I grew up having because my mom always made it. And let's just say that people who are not part of the immediate Koo family think it's kind of gross.

But I think we all have that dish from childhood that maybe if we had it for the first time as an adult, we'd be like, this isn't actually that good. But if you grow up with it, it just reminds you of something from childhood, it's tradition, doesn't make sense, but you love it anyway.

So that's a little bit about how my Thanksgiving went and I hope yours went well as well. So when I first started Wealthy Mom MD, and for those of you who followed me way back when, when you knew my brand or website as Miss Bonnie MD, as you know, it's been primarily focused on money, finance topics, education, where I try to break them down into bite sized pieces.

So basically it was primarily focused on financial education. And as I've learned more about money and started working with a coach myself, I started to realize that money is awesome for obvious reasons, but in the end, I think we all want to live a meaningful and fulfilling life, and in the end, money is just a tool that can help us achieve that.

But money in itself won't do that. I know we know that, but sometimes I think we need to repeat it and say it out loud. And that's one of the reasons why I chose the word wealthy for the new brand because it's not just about money. It's about living a truly wealthy life. A truly rich life, which involves money, but also involves the richness.

Things like meaningful relationships, purpose, et cetera. And so relationships is something I've been exploring a lot recently. One of the things I joke about is that none of us went to money school and none of us, at least most of us, didn't go to relationship school. Or at least I wasn't in school that day when that happened.

So when I was pregnant with Jack, that was about four years ago at this point, like many new moms, I started reading some baby books, some passed down to me, some I just ordered on Amazon. And one book I came across was a book called Brain Rules for Baby. And the tagline was How to Raise a Smart and Happy Child.

I do not recall how I came upon this book. It may have been recommended by someone, but I just don't remember. The author goes on to say that the key to being happy, which I think a lot of us want for our kids and for ourselves, but the key to being happy is to have high-quality relationships.

And he didn't just pull this out of his butt. He referenced a famous ongoing study at Harvard, sort of called the Harvard happiness study. Some of you may be familiar with this study, but basically, Harvard has been doing this study for decades.

And I don't know the exact details, but I believe they started serving graduates of one of their graduate schools, I don't remember which one, and it's been going on for decades. And I guess every year or so often, they send a survey and their goal was to figure out what traits, what qualities, what things contribute to happiness.

And so what they've determined is that the number one determinant of a person's “happiness” is having high-quality and meaningful relationships. So the Brain Rules for Baby author declared that you need to teach your kid how to be successful at relationships to teach them how to be happy.

Now, this might seem off-money topic, but really, it's not for a lot of reasons. Like I said earlier, our relationships not only enrich our lives and make us happy, but the people we spend time with, those relationships, they affect your bank account as well.

Now, you may have heard of things like you become the average of the five people you spend time with or something to that effect. Tony Robbins says proximity is power. And there's another saying that your net worth is the average of the people or the five people you spend the most time with.

And so I think relationships is such an important topic regardless of money or not, but it does definitely tie in with money. Now, for those of you who invest in real estate, as I do, real estate and business is all about relationships.

So such an important topic, such an important skill to develop. Now, from time to time I do some speaking. Recently virtual, obviously. And usually it's about money. But recently, I was asked to give a talk to physicians on connection.

Now, this was a symposium specifically for women physicians, and the theme was about thriving during the pandemic and about creating connection. And so I thought talking about relationships would be perfect. And so I'm basically going to rehash what I spoke about.

Obviously, this is a podcast though and not a video. And I did have some visuals, but I don't think they're necessary to talk about it. And so the talk was basically about how to have better relationships. Now, isn't that something we all want? And it's a skill that you can learn.

And so first, what I want to say about relationships is that relationships are so important. It's like in our DNA, meaning that we humans, we're meant to be in groups or tribes. All of us yearn for connection, and when we don't feel connection, we feel isolated and lonely and not happy, right?

And this year, more than ever, so many of us, including me, are feeling more isolated and disconnected. And so here's a question for you. Have you been feeling lonely lately or disconnected lately? And when I say lately, this was being recorded in 2020, the pandemic.

So depending on when you're listening to this, this may or may not apply. But pandemic or not, we all go through times where we feel a little disconnected from other people. Now, the best thing about learning how to have better relationships, at least in my opinion, is that you can improve the quality of your relationships and create connection without the other person doing anything differently.

I'm going to repeat that. You can have better relationships and create connection without the other person doing anything. Meaning that only you have to do something, or rather change your thoughts.

Now, some of you may be thinking, what? How is that possible? I think a lot of us grow up thinking it takes two to tango, right? It takes two people to be in a relationship, meaning one person or rather both people have to kind of give or take, so to speak.

Or maybe you're thinking well, what a bummer, because how many of us think that the relationship can't improve unless they change. So this might either be good or bad news, depending on who you're thinking about, right?

So before I go into this more, I first want to define what a relationship is. More importantly, what do you think is a relationship? How are you defining a relationship? Now, I find that when I ask this question, most of us have not really thought about this.

A lot of us kind of think that a relationship is something out there, meaning it's not inside of us, it's something between us and another person. But what exactly is that?

Have you ever considered that our relationships are simply what our thoughts are about another person and that they actually have very little to do with the other person? So let me illustrate that for you.

I want you to think about someone in your life that you have a close relationship with. Someone that you think fondly of. So maybe for you it's your spouse or a significant other or a close friend. Think about that person. How would you describe this person?

So I'm going to use my friend as an example. So I have a friend, Alison, I've known her for a very long time. We met during medical school. She's gorgeous, she's witty, she's fun, and loyal. It's easy to describe the people we love, right? So how is it possible that not everyone has the same exact thoughts about her?

Why isn't everyone who knows her in love with her the way I am? I want you to think about this. Because obviously, someone else, probably lots of people know Alison and have a completely different relationship with her. Why? How? She's still Alison, she hasn't changed. And that's because their relationship with her is dependent on their thoughts about her. Not her.

And honestly, this is the secret to relationships, when you truly understand this concept. Now that we know or at least we're open to the fact that relationships are our thoughts about a person, let's talk about these thoughts and why these thoughts are so important.

So as you know, this is sort of the hallmark of the type of coaching that I do, also called thought work. So just to remind you just in case it's been a while, a thought is simply a sentence in your head. It is that voice that is talking inside your head right now. Yes, that voice. That little voice.

Did you know that you have about 50,000 thoughts a day? Of course, most of them are subconscious, you're not really consciously thinking about them. How many of us think our thoughts happen to us and that they aren't necessarily optional?

Most of us also think we are our thoughts. Not only that, we believe our thoughts and we think they're true, like they're facts, meaning not changeable, right? So how does this relate to relationships and creating connection?

Connection is created by our thoughts. Remember the self-coaching model, our thoughts create a feeling, and the feelings create actions, which create our results. So connection is a feeling, just like acceptance and love. How many of us think that feelings just happen to us? Meaning we don't have any control over them, they just sort of pop up inside our bodies.

Well, what if that wasn't true? I mean, it's not a great way to live life, right? Being at the whim of whatever happens out there. So remember, our thoughts create our feelings. So let me bring this to my friend Alison to put this in this context.

So remember, thoughts are triggered by a circumstance and we define a circumstance as something out there, the what happened, the sort of neutral facts of the matter. And so in this instance, when we're talking about relationships, the circumstance is the person, the friend, whoever.

So in this case, the circumstance is Alison. So I'd say C equals Alison. And then you have a thought about the circumstance or the person or the friend or whoever because maybe they're not your friend. And then whatever I think about her creates what I feel about her, right?

Let's go through another example. Let's say your spouse or significant other or close friend of yours says some words. That's the circumstance. Literally the exact words they say. Then you have a thought about what they said, which creates an emotion.

But doesn't it often feel like the emotion just pops up into our body? We don't realize that it's not what the person said or even did. It's what we thought about it. So what does this all mean and why am I spending so much time on it?

So what does this all mean? It means love, connection doesn't just happen. It's created by our thoughts about a person. Your love for someone doesn't jump inside someone else's body and cause them to feel love because whether they feel love or not is created by their thoughts, which we can't control.

So now I want to take you through an exercise that could potentially and literally change your relationship with another person without them doing a thing. And so I want you to think about someone that you don't have connection with or feel love for and you want to do something about it. Rather, maybe there's someone that you don't have fond thoughts about and you're committed to or at least you're open to changing that.

At least play along. What do you have to lose, right? And so what I'm going to do is take you through a series of four questions. Now, these are adapted by someone named Byron Katie. She is – many consider her sort of the mother of modern thought work.

And so these are questions that I found, they're on her website, and I just modified them slightly for this exercise. And so for the purposes of this exercise, I want you to think of someone that you complain about, that you basically don't have great feelings about. And it's okay, I won't tell anyone, we all have people like that in our lives.

And so just think about that person and notice how you're feeling about that person. It's almost immediate, and you might not be fully aware of why you're feeling whatever you're feeling, and that's okay. If you do know what you're thinking about this person, go ahead and write that down. But if you're having trouble with that, I'm going to give you a prompt.

This is from Byron Katie. I want you to think about that person. So let me think about my person too. I'm just going to use the word Amy. I complain about Amy because… I complain about name of person because… fill it in with what he or she did or doesn't do rather.

So if you're listening to this and you're not driving or doing something important like that, you might want to pause the podcast right now and give yourself a few minutes to write this out. And if you're like most human beings, you probably don't just have one complaint about this person. You might have a lot.

So go ahead and fill it all out. Remember, I won't tell anyone. Okay, by now you should have at least one, if not five or 10 complaints about this person. Awesome. Just means you have a human brain, by the way.

Okay, so let's go through the four questions. I'm going to go through all of them and I'm going to go through them one by one in more detail. So the first question is, is it true? The second question is can you absolutely know that this is true? Number three, how do you react when you believe this thought? Number four, who would you be without this thought and which do you prefer and why?

Okay, let's go through them one by one. So remember, these are the four questions that you're going to ask yourself and I recommend journaling about based on this person you're thinking about, based on this person that you don't have great thoughts and feelings about.

The first question, is it true? Is this true? So whatever you're thinking, let me just give you an example. I complain about Amy because she betrayed me. So with that first question, is this true? And this is a yes or no question. And for some of you, you might think well yeah, she did betray me, of course she did.

Okay, so depending on yes or no, so if it's no, you're going to move on to question three. But if it's yes, meaning that no, it's actually true, when you go to question two and question two is can you absolutely know that it's true?

And many of you might be thinking yes, it's true. And this is where we want to question this a little bit. Because what exactly does being true mean? Now, I use the phrase she betrayed me. So this is an opportunity for me to really unpack that sentence, like what does that even mean?

And usually, there's a story about what happened. And so you might have to spend some time writing out your story of how this person betrayed you. This is just an example that I'm using, but you get the point.

Now, question three is how do you react or what happens when you believe that thought? Now, you can imagine that if I'm thinking that this person betrayed me, I'm going to feel pretty terrible. I'm going to feel almost self-righteous like she did something bad to me, right? It doesn't feel good, I'll tell you that.

Number four, who would you be without this thought and which do you prefer and why? I'm going to repeat that. Who would you be without this thought and which do you prefer and why?

If I truly believe that Amy betrayed me, I am obviously going to withdraw, I'm going to probably think not so great thoughts about this person and maybe tell other people that. It doesn't feel good. Even if I think I'm right, it still doesn't feel good.

And so when I ask myself who would I be without this thought, I probably have a lot more acceptance. I'd probably forgive and move on. And then when I ask myself which do I prefer and why, and sometimes, this is an interesting question because who wouldn't want to feel not terrible about someone?

But what I find often is our brains want to be right. We want to be certain. And even though we feel terrible when we think about this person, we think we're right about what they did to us and how we feel about them is right. But that doesn't feel good. It feels tight, at least it does in my body, it makes me feel disconnected in the moment with that person.

So here are some other prompts to help you with this question. What emotions or feelings arise when you believe that thought about this person? And when you're thinking about this, what sort of comes up for you in terms of like, images that flash in your mind about this person in the past?

And I love that question, which do you prefer and why? Because this is where I want you to think about how do you treat yourself and others when you believe this thought about this person? I recommend, and I should have said this earlier, that when you first do this exercise, I recommend you do it with someone where the feelings aren't so charged, where the thoughts aren't so charged about this person.

Because if you're thinking about someone that you have a sordid history with, like maybe your mom or someone close in your life, this may be a little difficult to do. And so I do want you to try this exercise for the first time with someone where maybe it's somebody at work. Maybe it's a patient. Maybe it's an acquaintance, where it's not taking up a lot of space in your life but you also know you don't have great thoughts or feelings about that person, or you don't think you have a great relationship.

But it's not like taking up a lot of space in your life. Start with that. And then you can move on to some more charged relationships. At least that's my recommendation anyway.

Okay, now as we go into the holidays, usually this is a time of the year that we're thinking a lot about the relationships in our lives, whether it's family members or other people, it's just what happens during the holidays, right? And so I hope these four questions will really help you examine what you're thinking about another person and you get to decide whether you want to keep those thoughts about them or not. You really do.

And so I hope this exercise was well worth it. I hope you get to see that you really can change the quality of your relationships just by changing what you think about that person. And I plan to do some more episodes about relationships because this is just one aspect of relationships and there are so many other tools that I can teach you about relationships and I'm looking forward to doing that in the future. If you've enjoyed this episode so far, I would love it if you wrote a review.

Hey if you're a woman physician who is ready to practice medicine on your terms, then you've got to check out my program, Money for Women Physicians. It's part course and part coaching, and 100% guaranteed to put more money in your pocket. Go to wealthymommd.com/money to learn more.

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Maximizing and Simplifying Charitable Giving

35: Maximizing and Simplifying Charitable Giving

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Maximizing and Simplifying Charitable GivingYou might believe (like I used to) that you don't have enough spare cash right now to make regular charitable donations. And if this sounds like you, I want you to listen in closely because I truly believe that our willingness to donate to charity says a lot about our mindset when it comes to money and beyond.

I want to preface this episode by saying that I don't think that anyone donates to charity for the tax breaks alone. If we're being honest, they are kind of like the icing on the cake. But when you get into the tax side of things, tracking your donations and timing them to allow you a tax break in a given year can be a lot to think about.

And if you've been listening for a while now, you'll know that I'm all about simplifying and automating, which is exactly what a donor advised fund (DAF) allows you to do when it comes to charitable giving and taxes.

Tune in this week as I share my own journey of charitable giving, and how you can simplify and maximize the process of both donating to good causes and taking advantage of the associated tax benefits.

What You'll Learn from this Episode:

  • My journey of believing that I didn't have enough spare cash to donate to charity.
  • How a donor advised fund simplifies your charitable donations.
  • Where you should consider opening a DAF to maximize both your donation and your tax break.

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Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 35. If you happen to be listening on the day this podcast comes out, it's Thanksgiving Day in 2020. I hope you're having a wonderful day and I realize that many of us are not spending it with the people we usually do, right, because of COVID.

So, today, I want to talk about charitable giving and just talk about giving in general. Now, I don't think any of us gives just for the tax break, I hope. But it's definitely the icing on the cake.

So, before we dive in, I just want to say that I think one of the best things about making money and having money is giving it away for good and making an impact.

In fact, it was Stu McLaren, who's big in the online marketing world, who told me that the more money you make, the more impact you can have. And that really stuck with me.

And when it comes to my own journey with charitable giving, I want to share a quote by Tony Robbins. And this is the quote that really helped me see why giving is important, at least for me. And so, he said, “People say, when I'm rich, I'll give. They're lying. If you won't give a dime out of a dollar, there's no way you're going to give 100 million out of a billion. But if you can do it today, the biggest thing that giving does is it teaches your brain there's more than enough.” So good.

I love this quote because it goes into the scarcity mindset. And I do have an episode where I talk about scarcity and how to get out of that mentality. But I think giving is one of those actions that does help you teach your brain, like Tony Robbins just said, to get out of that, “There isn't enough money,” mindset. And that giving, no matter what amount that is for you, it does teach your brain, there is enough, “I have enough money for me and I have a little bit to give away for good as well.” And that just feels amazing.

And so, just to give you a bit of my personal history with giving, I used to honestly be like what Tony Robbins was saying. During medical school, even during residency I'd say, “Well, I'm a student, I don't really have money to give away.”

And then, as a resident, even though I was making a decent salary, and in fact the average salary for an American, I still kept saying, “Well, I'm only a resident. I'll wait until I'm an attending to give.” And it just kept moving forward and forward. And then, once I became an attending, a full attending in New York City, I said, “Well, I have all these student loans. So, maybe, when I'm done paying those off, I'll start giving.”

And so, not that that was flawed thinking, per se, but I was teaching my brain that there isn't enough and that I have to keep waiting until I have more money. And then, when I heard this quote, it kind of hit me like a ton of bricks. Like, how can I figure out how to give some money today?

And giving is kind of a personal choice. I'm not saying that you should give to charity. But I know many of you do and so I think it's a great way to think about, giving to charity, giving to causes you love, one of the best ways that I love to spend my money.

So, when it comes to actually how to do that, I think that's kind of obvious. You can just write a check, put in your credit card to give to a cause that you feel strongly about. On the flipside of that though is you have to keep track of it for tax purposes. And that's, to me, kind of annoying.

And one of the things that I love to teach my students inside my program Money for Women Physicians is how can you make this easy, how can you simplify your money management? And this goes for any area of your life. How can I make it easy? How can I make this easier for me, simpler for me?

And so, when it come sot charitable giving, I think one of the ways to make it even easier is to consider something called a donor advised fund. So, before I go into what that is, a donor advised fund, we also call it a DAF for short, let's just talk about the regular way that most people give, which I just to send a check, put your credit card down et cetera, and then you have to keep track of it for tax purposes.

Now, in 2020, the current tax law is such that the standard deduction is higher, which means it's a little bit harder to itemize deductions. And so, when it comes to charitable donations, unless your itemized including the charitable donations are over the current standard deduction, you may not be able to take the tax break, which is kind of a bummer.

Like I said, I don't think anyone gives just for a tax break, but it is the icing on the cake. So, how can you maximize your tax deductions while still giving to the charities you love. Well, I have two options for you. One is to plan a bit ahead and to sort of lump your giving every other year or every third year, depending on now much you give.

Why? Because then you could take that amount of money – let's say you tend to give $5000 a year. But that might not get you over that standard deduction where you can itemize and get that tax break, right? But if you do it every other year or every third year – let's say every third year – then that would be $15,000 and then you would certainly, probably get over that standard deduction, depending on if you're single or married, right?

And so, that's just one strategy. But the other strategy is to use a donor advised fund. And this is something that I was personally hoping to create this year. But it looks like we probably won't.

So, a donor advised fund is basically where you have your own charitable fund. First of all, that just sounds kind of fancy. Like, I have my own fund where I can give to charity.

And so, anything that makes me feel, sort of, of a higher status – I know that sounds kind of strange but it makes me feel kind of cool. Well, I don't have one yet, but once I do, I feel like that would be just sort of neat to be able to say that. And so, there's that sort of cool factor.

Number two is you donate to the fund, and when you donate to the fund is when you get the actual tax break on your tax return. So, what does this mean? This means that the year that you're ready to open up a fund – and I'll talk about where you can do that in a second – you can donate something like $10,000 or $20,000 or $30,000. Or you can do a larger amount. And take that tax break the year that you do that.

And then, the best part is you donate from the fund. It's all one online. But you don't have to give track of where you've contributed for tax purposes because you already took the tax break when you donated to the actual fund. Does that make sense? I hope I haven't lost you.

Let me just repeat that again. When you open a donor advised fund, you contribute to it. and usually, when you open one, you donate a larger amount. So, let's say $10,000, $20,000, $30,000, whatever. You take the tax break the year you fund the fund. And then you give from the fund to your favorite charities, et cetera. But you don't have to keep track of it because you've already got the tax break. Do you see what I'm saying?

And so, this is one way to simplify your giving, because you don't have to keep track of it. Anything you have to keep track of in terms of receipts, that to me is just like extra work. It takes up extra space in my mind. I'm all about simplifying and automating as much as possible in all areas of my life.

So, if you are someone who loves to give, doesn't want to have to deal with where's the receipt, scanning it, et cetera, keeping the records for seven years, because supposedly you should be keeping any tax records for seven years. Like, who does that, really? I don't anyway. You don't have to do that with this?

And so, where do you open a donor advised fund? Great question. So, I'll just name the most popular ones. And these are custodians that many of you are already familiar with? So, Vanguard, Fidelity, and Charles Schwab are the first that come to mind.

Now, they all have different amounts in terms of minimum amount to start the fund, and so, Vanguard has the highest at the time of this podcast recording. I believe it's $20,000, in that range. And so, if you want to start one but you don't want to start with $20,000, then you can go to Fidelity or Charles Schwab. They have lower minimums.

Now, you might ask me, “Well, where should I open in?” Let's say the startup fund or startup fee isn't a big deal for you. I would open it wherever you have your taxable brokerage account, if you have one.

So, a taxable brokerage account is just simply where you have money that you invest in the stock market. That's after-tax money, meaning it's not inside of a Roth IRA or a regular IRA. It's not your retirement fund. It's just extra money that you invest.

And so, our taxable account is at Vanguard. And so, it would be easier if I create my donor advised fund at Vanguard. And then the next question you might have is, why? Besides the fact that I just like to keep things simple – as I've said before, I like to keep things in similar places because I'm already familiar with Vanguard and their funds.

But the second reason why this is also a good thing to do, meaning keeping like with like when it comes to your taxable brokerage account and your donor advised fund is because you can then donate directly from your taxable account into your donor advised fund and take advantage of another tax break. Are you ready?

Did you know you can donate appreciated shares from your taxable account to charity? Maybe you knew this. Maybe you didn't. And why is this such a great thing and why is it such a big deal? There's a few things.

Number one is when you donate appreciated shares, like if I bought an index fund and it went up in value, which we all hope is what happens when we invest, when I donate that to a charity, I don't have to pay capital gains on those appreciated shares. In fact, I can deduct the full amount of the appreciated shares I donate. And the charity gets the full amount of the appreciated shares and they don't pay capital gains as well.

So, basically, nobody pays capital gains. Everybody wins because I get the tax break at the appreciated shares amount and the charity gets the fully appreciated shares and they don't pay taxes either.

So, you can do this directly, whether you have a donor advised fund or not, just FYI. But if you do have one, it's much easier to donate it from your, let's say, Vanguard taxable account directly to your Vanguard donor advised fund. So, that's what I mean by keeping things simple, keeping things in-house.

So, if you have your taxable brokerage account at Fidelity, then you should look into the Fidelity donor advised fund. Or if you have it at Charles Schwab then likewise.

And so, I think this is a great way to donate to charity using your taxable brokerage account because the money is invested, hopefully. It's going to grow. And if you use it for yourself, you have to pay capital gains, whether it's long-term or short-term, right? But if you donate it to charity, you don't have to.

So, in some ways, I think it's a better way to donate because it's going to appreciate, and then you can donate that appreciated share to the charity without having to pay capital gains.

So, two caveats I want to say about giving and taxes. One is, if you are going to donate appreciated shares, there is an IRS rule that limits it to 30% of your adjusted gross income in any given year. If you're donating cash, meaning via check or credit card, you can deduct up to 50% of your adjusted gross income.

Now, most of us probably aren't giving anywhere near that level, so it's not something to think about. But in the future, if you start to give more, then it's something you'll have to think about. That's all.

Lastly, if you're relatively new to giving or haven't because you were maybe like me in thinking, “Well, I don't really have any extra money to give,” I would just question that belief that you don't have extra to give. Because like I said, even if you give a little bit, it does start training and teaching your brain that not only do you have enough for yourself, but that you actually have enough to give away as well. And that is just so powerful and will really help retrain that scarcity mindset.

Well, that's all I have for you today. And so, thank you so much for tuning in. And I would totally love it if you would not only subscribe to this podcast, but also left a five-star review. It helps other people find this podcast as well. Thank you so much. See you next week.

Hey, if you enjoyed this episode and don't want to miss out on new episodes, please hit the subscribe button on your favorite podcast app. See you next week.

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Real Estate and Relationships with Dr. Kate Mangona

34: Real Estate and Relationships with Dr. Kate Mangona

Apple Podcasts Spotify Stitcher

Real Estate and Relationships with Dr. Kate MangonaMy guest this week is Dr. Kate Mangona, and there are two very good reasons why I have her on the show this week. One is that Kate and her husband Victor are real estate investors and have an incredibly interesting story about how they started and how their investing style has evolved. The other reason is that she is a relationship coach, and we're both very passionate about the belief that we have to invest in our marriages for so many reasons.

Dr. Kate Mangona is a practicing board-certified pediatric radiologist, mother of two. With her husband Victor, she is an active and passive real estate investor with a portfolio worth over $5 million and will reach financial freedom at just five years out of training. Kate is also a relationship coach who helps physicians find peace and joy in their marriages and live a purposeful, meaningful life, and I'm so excited for you to hear our wide-ranging conversation.

Tune in this week as Kate and I discuss her work as a relationship coach for physicians, and why your marriage is worth any investment to protect. We're also diving into Kate and her husband Victor's real estate investing journey, which in just five years, although it sounds a little hectic, has really moved them along in terms of their financial goals.

What You'll Learn from this Episode:

  • Why divorce is the number one financial risk for female physicians.
  • How to invest in your relationship in order to make it last.
  • The story of how and why Kate decided to become a coach.
  • How Kate and her husband first got started in real estate.
  • What you can do for yourself to change your own experience of your relationship.
  • The sacrifices that Kate and her family have made in order to set themselves up financially for the future.
  • How Kate and her husband took their real estate investing down a more passive route.
  • Kate's top tips to improve your relationship with your spouse.

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Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 34. So, today, I have a guest. I have Dr. Kate Mangona. And so, you'll hear about how Kate and I met. But the reason why I had her on the show was twofold. One is, her and her husband, Dr Victor Mangona, they invest in real estate. And they have a very interesting story about how they started and what they still continue to do. I just thought that'd be really helpful for all of you listening who are considering doing real estate with a spouse. Their story is very unique and it's very funny.

And secondly, I also wanted Kate on the show because she also happens to be a relationship coach. And her and I both firmly believe that investing in your marriage is so important. We talk about why it's so important, not just for your mental wellbeing or your mental health, but also for your financial health.

And so, Kate and I go into some tips that hopefully will help you have better relationships with your marriage, and also learn a little bit about real estate on the way. Have a listen.

Bonnie: Welcome, Dr. Mangona.

Kate: Thank you, Bonnie, Dr. Koo.

Bonnie: So fun to have you here. So, can you just briefly introduce yourself for those listening who may not know who you are?

Kate: Sure, okay, so I am a pediatric radiologist. I currently practice in Dallas and I have two toddler girls, a three-year-old and a 17-month-old. My husband, Victor Mangona, he's a radiation Oncologist who specializes in pediatrics as well and we've been in Dallas and practicing for five years now and we also are very passionate about real estate investing as well. So, we have several multi-family properties, single family properties, and a luxury Airbnb, which actually we moved back into just before the pandemic. That's where we are.

Bonnie: Awesome. And Kate was a student in my Money for Women Physicians course.

Kate: That's right.

Bonnie: So, that was super-fun. And now, Kate, you are in coach training now too, right?

Kate: Yes, I'm in the Life Coach School, which actually I never thought about doing until I enrolled in your course and then, all of a sudden, these questions started popping up in my head, like how do I want to create value? How do I want to give back? How do I want to add more than what I'm already doing as a physician? And then I decided, okay, well I am super-passionate about relationships and marriage and always – I'm actually just very curious about relationships and how to invest in myself and in my relationship to keep that strong. And why don't I just teach what I learn?

And so, I was going to, first of all, start a podcast called Medicine, Marriage, and Money. And that was my first springboard, my first action. I was like, “I'm going to do this. I'm going to start interviewing people, really successful people in medicine.” And in doing that, I was like, “Okay, well how am I going to make this a business?” And I said, “Okay, I want to actually coach people on relationships.” And then decided I was going to go to Life Coach School to become a coach.

Bonnie: I love that story. I mean, there's always something that happens. And relationships – it's funny because I'm actually giving a lecture this weekend for a group of female physicians and I'm actually not talking about money, which is kind of funny.

Kate: Oh, you're not?

Bonnie: Yeah, I'm talking about coaching through the lens of actually relationships and connection. Because a lot of people are feeling isolated during COVID. And so, the reason why I bring that up is because having high-quality relationships is the number one determinate of being happy. Which you probably know since it's what you do.

And so, it's so funny to me – well, it's not funny. It's sad that no one teaches us how to have great relationships. It's such a fundamental life skill. You would think it would be in pre-school or something, you know.

Kate: I totally agree. Everybody wants human connection. Even introverts like me. We all just, at the end of the day, want human connection. And yeah, where do we learn that from? The first place we learn that from is our parents. We kind of look and see what kind of example they're setting.

Then we grow up and we go to high school and we go to college and we see what other people's families are doing. And it's kind of an epiphany for some of us because we've spent 20 years or 18 years of our lives living with the same one or two, or maybe multiple parental figures. And we realize we can either choose to perpetuate what we see, or change that.

Bonnie: And many people don't even learn that.

Kate: No, that's right. And for us, for me and Victor, we both grew up in – both of our parents are still together and so we both kind of grew up with this vision of what our marriage was. And none of our parents are perfect. They don't have the perfect relationship. They all have fights. They had big fights growing up, both his parents and mine. They're both working, very, very hard-working parents.

And so, I saw my parents work so hard, sacrifice so much. And they're still together. Now they're both retired, they have all this time to spend with each other, to nurture their relationship. But how much better could it have been when I was living at home if they would have spent time – and maybe they did. I didn't see everything that was going on. But I don't even know where I was going with that. I think because you were going to ask me about investing in your marriage, right?

Bonnie: Yeah, that's why I have you on the show, to talk about this topic. Because it's not something we talk about a lot when we talk about money. But if you're in a committed relationship and esp3cially if you're married, because that is a legally binding contract, even though none of us like to think of it that way. And so, one of the things I teach inside my program, Kate, is that our number one risk as a female physician, meaning not only the primary breadwinner, but often an equal breadwinner, is getting divorced.

And people don't really understand that. That is the number one risk in terms of money, in terms of asset protection. Everyone wants to make sure they're ensured, but how many female physicians actually have a prenup? It's probably very little. I'm trying to change that, obviously.

So, since most people don't have a prenup, and most people don't want a postnup, which is kind of a different conversation seeing as it doesn't usually hold up in states anyway, so then it's logical that people need to invest in their relationships, assuming it's a good relationship, obviously. Neither of us are saying you should stay with someone if they're being abusive in any way. But assuming it's not going in that direction, I wanted to do an episode with you, Kate, so we can hopefully give people some tips on how to invest in their marriage, like what does that mean? And also, just to empower women that they really can change their experience of their marriage, their relationships by only working on themselves, which is either good or bad news.

Kate: Exactly. No, I totally agree because I spent the first several years of my marriage trying to figure out how to communicate. I was an only child. I usually only had to deal with my own wants and feelings growing up and really not any – my mom gave me everything I wanted emotionally. And then here I was, living with somebody for the first time ever and I'm like, “Oh…”

And I really thought he knew what I was thinking because I feel like my mom could usually tell, my best friend could usually tell. And I was like, Victor is a very sensitive person and any time he befriends somebody, he gives that relationship everything. He goes out of his way to make sure they're knowledgeable in whatever they ask. If they ask something of him, he will deliver.

So, I was like, “For sure, he will just be able to read my mind.” And then I realized that was not the case. And I was like, “Okay…” But I also have always been very cautious because even though we both grew up I a two-parent household, I had a very, very close bond, who was kind of like a sister to me, go through a very dramatic divorce when I was in college.

And so, I saw that. Because from the outside, they looked like they had the perfect marriage. They traveled every other month. They never fought, ever. And they were married for like 20 years. And that changed all of my thoughts about what marriage and relationship were. I was like, “Moving forward, I'm going to be more curious about the other person in my relationship.”

And then I realized, you know, it does take effort and it's normal to get in fights and get in arguments and not be on the same page, but to want to continue to grow together and work through those hard times. I think that's really special and something that you just have to know, even if something looks good from the outside, it's not always on the inside. When you're getting into arguments, that's probably normal, so let's just work on how we argue.

Bonnie: Yeah, that's such a good point because we never know what's going on between two people, their relationship. Only they do. And yeah, of course, there's people who get divorced and were like, “We knew that was going to happen.” But a lot of times, you really don't. I don't know, I do have friends who've gotten divorced and I can't say it was always predictable. What about you?

Kate: I mean, I feel like sometimes it just happened. And the two times, it happened to my aunt and it happened to somebody else I babysat when I was in high school, they seem like the perfect people from the outside. Sometimes, you just have no idea.

Something else that you talked about, us as physicians and how divorce is one of the worst financial things that could happen to us, and especially as women physicians, and especially if you work more than 40 hours a week. I was doing some research a few months ago about divorce rates in doctors. And it's actually not that high for male physicians. But it is, like, one and a half times more common for a female physician who works greater than 40 hours a week to get a divorce.

So, I think that's pretty alarming and something that I think, probably because they're focusing – a lot of women, female women, we feel like we have to prove ourselves in our careers, in our jobs. And then we expect our relationship to just kind of hang out and maybe be okay on its own. When really, we have to nurture and care for our relationship the same way we study for boards, go to residency, you know, nurture our children. And we just forget to think about that.

Bonnie: That's a good point. So, the divorce rate is lower the more educated you are, and physicians do enjoy a relatively even lower divorce rate for socioeconomic status, but not quite the same thing for female physicians. And yeah, I saw that study too where if you're working – I didn't know if the cutoff was higher actually. And I thought it was by specialty, but maybe it was by hours a week. Which kind of happens in certain specialties more than others, right? And so, I thought that was interesting too.

And so, I don't think it went further into exactly why that is. I think we can probably make some assumptions. But it' shard to know. So, tell us more, since we want to talk more about money, so I first met you and Victor, I think FinCon, right? That was a few years ago.

So, FinCon is an annual conference for anyone in sort of the money blogging podcasting world, and it's also for financial advisors. And so, I knew about Victor before FinCon I think. I don't remember exactly how I first heard of him, to be honest. But I know I met you guys there for the first time.

Kate: He posts a lot in all the Facebook groups. Victor posts a ton. He used to post every day in all those physician finance – Physician on Fire, Whitecoat Investor, all those different groups.

Bonnie: And also, I remember, he went to medical school with Carrie Reynolds.

Kate: Yes, yes, we were listening to you before we even met you because of Carrie Reynolds.

Bonnie: Yeah, now I remember. There was another connection. And obviously, I knew Victor was very knowledgeable about money and then also specifically about real estate. And also, if I recall correctly, he knows a lot about regular personal finances as well, not just real estate, right? And so, what was that like for you? Were you equally into the real estate and money as well or what were your thoughts at that time?

Kate: Oh, no. Okay, so I was not surrounded by real estate, I would say. My parents had rented out their basement when I was a baby. But we didn't have rentals being managed. They did want to buy me a house when I went to medical school and they're like, “If we buy you this house, then you can rent it out to roommates and this can be an investment.” I was like, “No way. I have to focus on medical school. How can I find roommates when I don't have time to have friends?”

I was in a completely different mindset. And then, I went to residency in Detroit, or just outside of Detroit. And this was in 2009, just after the 2008 crash. And this was for my residency. And my uncle was like, “Oh, just buy a house. Buy something in Detroit. You can live in it…” And I'm like, “Are you kidding me? I have to go to residency. I have to learn how to become a radiologist. And then I'm going to have fun when I'm not doing that. I'm not going to manage a rental property.”

So, I had people in my life who tried to get me on that path in medical school and residency and I was like, “No.” And Victor, once I married Victor, he owned a condo. I mean, it was like a $60,000 condo just outside Detroit. But that's what he owned.

And then he's like, after we got married and moved for fellowship to Houston, we had to find somebody to live there and rent it out and we decided we were going to keep it. It was his and that was his first rental property. And then we were married, so I guess it's both of ours. And real estate for him was a way of life.

His parents grew up fixing up property like every weekend of every month because they owned a fourplex close to where they lived in Detroit and then they owned a big house in Ann Arbor for the University of Michigan students to rent out. So, that was just kind of like – his dad got it and so he understood from his dad.

However, he saw that his father never really explained to his mom why they were doing it. She kind of thought it was a pain and would complain, “Why do we have to go to this house and clean up? Why do we have to go repaint?” And then eventually, once they retired and they had this cash flow coming in every month from the rentals, she's like, “Oh…” And then they started taking all these nice vacations and they weren't even working. She's like, “Oh, this is why we did this for 30 years,” or however many years it was.

And so, he's like, “That's not going to be us. First of all, we're going to do real estate because that's the way of life. And you're going to understand everything we're doing.” So, once we got married and we started fellowship in Houston, we occasionally went to the real estate investor meetups in Houston.

Granted, we were both in fellowship and both had fairly busy fellowship years. And so, we would only go a couple of times. Plus, we were both broke. And he was like, “Once we start making money, once we start our attending jobs, we're going to find these people again and we're going to sign up for their programs.” So, that's what we did once we moved to Dallas and started our attending jobs.

Just like it was a normal thing, we started going to the Dallas Real Estate Investment Association, joined a single-family association, and we would go twice a month. It was before kids, but it was like our date. We would go, eat the hors d'oeuvres, listen to the little lecture and network with all these people.

And I can't say that I really understood what we were doing every single time, but it became a thing, just a normal thing. We did it every other week. And we did it for a couple of years. And we found people that we could help, like, we could bring some money to the table, help these people fix up a home. We could be private money lenders.

And then, we started going to the properties and walking them and I started, like, “Okay, so this is what we're doing.” Because, at first, I had no idea. I was like, how are we going to have time to find all these houses that are in foreclosure? Which we tried. We actually did go door-knocking. So that was our first couple of years of doing the single-family stuff. Plus, we each bought our own property. I bought the house when we moved to Dallas, and then a year later, he bought a house.

And that was going to be our plan, to buy a house a year and eventually have this portfolio of all these single-family properties that we rented out or did short-term rentals. And then, after two years of doing that, we realized, oh my god, this is so much work. Plus, the banks would only give us so many physician loans. We got two physician loans to do this, one for him one for me, which was a real big struggle anyway. But we did it with the intention of eventually, after living in each home for a year, investing it.

So, we knew they were going to be investment properties. But then after two years of doing this, we decided we needed to go bigger. And that's when we decided to join a different real estate association group and we joined the multi-family investing group here in Dallas. And we would go on bus tours, learn all about multi-family investing.

And I will tell you, I did it because I wanted to know what it was all about. I was just curious. Victor did it because he was like, “This just makes sense. This is how we're going to invest. This is how we're going to leave a legacy for our family, for us and not have to work forever.”

And it's opened my eyes. I never thought any of this stuff was normal or doable. I used to be a fulltime physician until last year for four years, and then I cut back to 0.7. And then with kids and a family, I just never thought any of this was possible. But I put so much trust int Victor because our values and our goals I knew aligned, that he really kind of led the way. And I was so open and curious, jumped on board. And I'm so glad we did.

Bonnie: I think everyone listening now is like, “Man, I wish I had a Victor that told me that real estate was the way to go and drag me to these things.” I think a lot of us just don't even learn about it at all. I mean, I'm just trying to think – I actually read Rich Dad Poor Dad when it came out. So, I was actually in my early 20s.

And I remember reading it – I don't know if you've read it, Kate. He talks about real estate as something everyone should do and why it makes sense and talks about the concept of leverage and et cetera. And he was talking I think mainly in the context of active real estate, like owning property like you did initially.

I remember thinking something similar to Victor, like, “Oh, this makes sense. This totally makes sense.” And then I guess I went to med school and forgot about it for a very long time. And I honestly didn't even think about real estate until I met Letizia and Kenji. And even when I met them, I was like, “I don't think it's really for me.”

And it actually took me a really long time to finally start. And I'm still super-early in my real estate journey. And I don't say I'm not still 100% in it. Like, we just bought our first property this year. But I didn't know that that's how you guys started. I just assumed Victor was always into passive.

I know you guys did some short-term rental type stuff. And so, I'm curious about what has him, or what had you guys transition out of managing properties directly and going right into passive real estate? Because I know he's really passionate about the passive stuff now.

Kate: Yes, well for very good reason. So, we bought our first house when I moved to Dallas and we became attendings for the first year. So, after that year, we're like, we're going to just test out Airbnb. So, I briefly mentioned the Airbnb. And we actually had people living in our house.

They would go to the third floor – we did this a couple of times. They would come in, go through our kitchen, go up to the third floor and live there. It was just the strangest thing. I had never had that happen to me. But we tried it out. It was successful.

Then we're like, “Okay, we're going to start renting out our house on the weekends.” And so, we put it up. And then somebody wanted it for like six weeks. Actually, a professional football player who was coming here to train. So, we were struggling to figure out where we were going to go for six weeks or for weekends or for weeks while we were renting our house. And we did that for a couple of years. But then we realized…

Bonnie: Can I just stop you for a second? Because I just think this is such a – it's funny to me that you guys didn't even consider, “We can't rent it out for six weeks.” You were like, “No, we'll do it,” and then you're trying to figure out how to not be in your home. It's kind of crazy in a fun way, you know what I mean? It's so cool that you guys even did that.

Kate: Of course. Everybody at my work thought I was crazy. All the radiologists are like, “What are you guys doing?” We're living out of our suitcase. We moved into his coworker's loft. She moved in with her boyfriend. Of course, we paid her to live in her loft. My mom was even visiting at one point and I remember even one weekend, he was going on a trip. The first weekend we did this, he went on a trip and it was basically just me. He's like, “You've got to go get yourself a hotel room, you and Penelope.” And I was – my first time, I was so nervous with Penelope, our god, our poodle, because that was our first fur baby – figuring out which hotels allowed dogs, feeling so awkward. And then it just became normal.

And then this is the big thing I had a problem with is eventually we just got an apartment. So, we moved back and forth, back and forth for about, I don't know, a year, a year and a half before we're like, “Okay, well we're just going to stay in the apartment. That will be our house.”

But we actually got a cheap little apartment. Maybe not cheap. It's Dallas. But an affordable apartment where we could make money, pay off the mortgage, and pay off our apartment lease. Which is winning because you're still gaining equity in the house by paying off the mortgage annually. We were living for free.

Bonnie: Who's idea was this? I'm just curious.

Kate: This was all Victor's idea. And he was just like, “We're just going to put it on Airbnb and see what happens.” And I'm just like, “Okay.” I'm a super go with the flow type and very flexible. He's very lucky. I'm super-flexible. But it's not like there weren't struggles along the way because there were.

It's be like, “Well, Victor, every time we move back and forth, I have to pack up all my face creams or my hair tool.” He's like, “Okay, you just need to have two of everything.” And we literally bought two of everything. And we had a baby. We bought two cribs, two changing tables. Not just the little things, but the big things.

And I would say this is going to cost us this, this, this. And he's like, “Kate, you are not thinking about the big picture. Look at this. These things are little tiny worries you have here. This is what we're going towards.” I'm a very, very detail-oriented person and get anxious over little things and he is a very big picture. So, we complement each other in that way. And then he's constantly like, “We just need to be more low-maintenance.”

Well, that's not really possible. He's not low-maintenance either. But we made it work. And so we did the Airbnb thing for several years. But the first two years when we were just doing the single family, we had the two houses, we're like, “Oh my god, this was so much work. How are we going to buy a new house every year and do Airbnb?” Because that's actually where the money was. We made much more on our Airbnb than we did on our long-term rental next door.

And so, we just kind of thought about that. Like, this was so much effort. It's not like it was easy. It was effort. I managed all the inquiries, all the Airbnb inquiries. I responded to everyone. I Googled who they were. Because we only said yes to about 50%. I mean, sometimes they were teenagers wanting to have a party. Sometimes it was a bachelor party. I had to kick people out sometimes. So, it was not – our heart was sometimes in our throats. I will say that.

But it was fun. We met so many incredible people and, like, the football player, some pretty neat people to meet. And just very, very nice people. But then we just couldn't do it as we had in the beginning once I had kids. It's like the driving back and forth, meeting people, we just didn't see that feasible long-term because we were managing it ourselves. That was another thing.

So, it's like, what are we going to do? So then, we had known about tis multi-family person from actually another real estate meeting we had went to when we were in fellows. Like, we're going to investigate going to this guy, Brad Sumrok, The Apartment King. We're like, we're going to go to him. And he's actually friends with Letizia and Kenji and Peter.

And so, we joined his group with Shanola, my first baby. And we did that – we went on those bus tours for I think at least a year. I mean, Shanola was the youngest investor on that bus tour for like 10 bus tours. She would go with us until she started walking and stuff and we couldn't bring her anymore because it was just too much.

But yeah, so that's why. And the other key thing is, so we didn't know how we could scale single families at the time. We're like, we just need to go bigger and faster. Now, we were also making more as attendings. He had become a partner.

And so, our time is more valuable. So, now, we were making more per hour and yet we were also still putting out time into this short-term rental and into our single-family properties. So, at that time, we realized something had to give. Our time was more valuable. So, that's when we decided, we're going to invest more in passive real estate, find a team that we trust and have similar goals so that we can trust them.

And Victor is amazing at networking online. We went to these – the mean goal of going to these meetings was to network. And that actually took us a couple months because we'd go and we'd learn. And then everybody is talking to each other on the bus the whole time or at the properties. Which was uncomfortable to me because I'm like, “I am a physician. I don't' know anything about investing.” But it was just meeting people, figuring out what they could bring to your team and what you could bring to their team. And meeting hundreds and hundreds of people before you find that one team or those couple of people where you can bring value to them and they can bring value to you. So, does that answer your question, Bonnie?

Bonnie: I don't even remember which question we were talking about at this point.

Kate: If you're wondering how we went from single to multi-family.

Bonnie: So, I'm curious. How long did you guys do that Airbnb thing?

Kate: We bought the house in 2015. We started Airbnb the summer of 2016. And then we just stopped Airbnb in February of 2020. So, Summer of 2016 to February of 2020. So, what's that, three and a half years? And get this, Bonnie. We are going to be moving out again in a couple weeks for the week of Thanksgiving.

Bonnie: Where are you moving to?

Kate: We're just going to another Airbnb down the road. It's hilarious. And it's a different part of town.

Bonnie: Wait, are you selling your place or you're renting it out?

Kate: We're just renting it out for a week because we still have our house on Airbnb and VRBO, so we still get requests. And most of the time, we turn it down because it has to be worth our time. We've been living here now since February, since right before the pandemic. And we've got everything. We've got our new podcast equipment here, my workstation.

So, you can tell we've been living here since February. We used to be so used to keeping things minimal and clean. So, we're going to have to do a major clean out, which is what I love. So, I hired a babysitter this weekend so I can do a major clean out of all the drawers, all the closets, fix the lights. Things that you just let go when it's your own house. And then we'll move out for that week. It will be Victor and the two girls and Penelope, our poodle, in that Airbnb in a really cute artsy art of town. And then I'll be working.

So, I'll be working that entire time. I'll be doing six call days in a row, which is me and somebody else will rotate. But yeah, so I'm actually excited because it's been how many months since we've lived somewhere else? It's been way too many months for us.

Bonnie: They must have offered a lot of money for you guys to go somewhere for a week.

Kate: Yeah, it will be able to pay our mortgage, so…

Bonnie: Awesome, well the reason I asked how long you were doing it is because what changes have you guys been able to me? You just mentioned that you had cut down to 0.7. And so, I guess the question really is, was it worth doing that for that time and how did doing something like that for a few years, how has that set you guys up in terms of your financial future now?

Kate: Okay, I think just the experience in itself was amazing and awesome. And I learned so much as an entrepreneur myself that I can do these things I never thought possible. Victor and I work really well together as a team. And then yeah, financially, it did help because I don't really know the specific numbers. I always kind of leave that to Victor.

But it did help because helped pay down our mortgage. We were paying down our mortgage that entire time. So, it's a duplex. One side of our duplex is a long-term rental and then this side was our Airbnb side, which now we're in. So, long-term we have a property manager manage that. But yeah, how did it set us up? I think it just showed us what was possible and then propelled us to keep doing more.

Bonnie: Yeah, I didn't know that your current place is a duplex. I could just see Victor at work just strategizing as to all this type of stuff, you know.

Kate: Yeah, and it's not like the – the official word is not duplex because in Texas, in this particular area, they're called attached single-family homes because they're deeded separately. So, you don't buy the duplex as one. Very poplar here because of the school district and families wanting to find a place to live.

Bonnie: So, are they sold together or no?

Kate: No, I mean, it's just like – probably if you go to San Francisco or something, all their homes are attached type of a thing. It's kind of like that. But in Texas, most of the neighborhoods, the homes are separated. But in this particular city we live in, university par, Highland Park, land is so valuable. It's like a city within Dallas. So, location is spot on. You have access to all the things in Dallas, you're not in a suburb. And it's got its own school system, its own police system. So, it's just a very sought-after area. And there's not much land. It's only like a couple square mile radius…

Bonnie: So, its dense, would you say?

Kate: It's dense with big homes, with either big homes or these attached single-family homes. But yeah, that's why the land here is so valuable compared to, like, suburban Dallas or something like that.

Bonnie: Okay, awesome. I didn't know – I finally learned everything about your guys. I just see what you guys do now. I heard about the whole Airbnb and I remember thinking that was nuts but in a fun way. And I think about, how many people – you and I, we meet a lot of physicians who want to make some major financial changes. But how many of them are willing to do something like that? I'm not saying it's bad that they're not, but it takes something to be willing to do something like that, to kind of completely change your lifestyle and have it interrupted, to set yourself in the future financially. But it sounds like it's worth it.

Kate: I mean, I loved it. And I think most physicians would not. I mean, I actually met – one of my radiology residents a few years back was starting some Airbnb adventures. And yeah, other physicians do. I think there's an Airbnb Facebook group for physicians. But not many physicians I know are willing to do that or trusting people to come into their home.

The other question people ask me is, “What do you do with all your things?” And it's like, I don't really own a ton of valuable things, to be honest. There's a couple pieces of jewelry and we have a safe and we lock the closet. Or I just take that with me. That's why, the further and further along you get into your physician career, it's hard.

We started right out of fellowship, so it was easy. And then we just continued doing it, and to two kids. And finally like, okay we're going to stop doing it after we have the second kid. But it's so addictive, we couldn't stop because then we kept getting these insurance claims, like people's homes were destroyed in the tornado or the floods we had a year and a half ago. And it's like, “They need help. They need a house and we can help them and they're going to pay our mortgage and more and more and more.” It's just addictive.

Bonnie: I remember during that time, because of the natural disasters, that you guys were able to rent out your place because housing was in such high demand in that area. So yeah, that's awesome. Okay, so let's transition now to talk more about you and Victor in terms of relationship. So, tell us major lessons you've learned in the past year and how coaching has, and also why you pursued coaching to help other physicians with their relationships.

Kate: For sure. Okay, so where do I want to start here? Coaching completely changed my life. Not that it was bad before. Because I think some people don't understand this. I had a very good life before. I just felt stuck. I was cruise control on my career. I love being a pediatric radiologist. I go to work three and a half days a week. But I had two young kids. This was back when I very first discovered coaching.

You had mentioned to me – we had met a couple of years ago and you had talked to me about it. And I'm like, “Oh yeah, coaching is just for people who want to get ahead in their career, they're an entrepreneur, they're studying a business.” I really didn't know what it was about. I didn't know it could help you personally in your life.

And then, I was kind of exhausted and worn out. I was still sleeping with both of my kids. My two-year-old at the time, my two-year-old and my four or five-month-old was still breastfeeding, still trying to navigate all of the issues that come with that like the tantrums and the sleep training and the emotional vomiting and all that kind of drama. And then still trying to find time to connect with Victor.

But then once COVID started, everything changed. Everybody's lives kind of turned upside down. Well, not everybody's. But I feel like it affected us because of safety reasons and Victor seeing patients and me maybe going to the hospital, Victor decided he'd move into a hotel. So we weren't seeing each other for a couple of months.

We had an au pair who lived with us. We had to tell her she couldn't see her friends anymore. And we were an extra-strict family. So, there was all these tensions. And then I was just like, we just weren't spending time talking to each other, loving each other. And I was just feeling so resentful.

And so, then I was like, “I'm going to reach out to one of these Facebook physician coaching groups. The first one I reached out to was Dr. Nowitzki because she was giving a free month subscription to her – she has a subscription program and I was like, I'm just going to try this.

After that first group coaching session I did with her, lightbulbs went off in my head because she asked me – I was feeling unappreciated. That was the feeling I had. And she's like, “Well, what makes you feel appreciated right now? And write all of those things down.”

And I was like, “Oh my gosh, I can feel appreciated if I want to feel appreciated. I just have to write all these things down and have all these thoughts right here instead of these other helpless victim-card thoughts. Like, I was playing the victim. And then I was just like, “Wow, I'm really in control of my happiness here inside of my relationship and outside.”

And like I said, Victor and I, we always worked as a team. We always had similar goals and values. But we argue, just like every other couple. And I just feel like we would go on those cycles. And this really helped me figure out how I could show up differently instead of waiting for him. A lot of us are like, “If he just didn't say that or do that or react that way…” But, like, how are you showing up? And like how are you reacting?

Because a lot of times, we get upset at somebody else for doing something because we know, because we do it too. So, then I started looking at myself. I need to stop playing the victim. I'm going to show up more lovingly. I'm going to put date nights back on the calendar every week, like we were doing before, regardless of what we're doing. If it's out for a walk or just sitting there or talking, whatever it is, I'm going to put that.

And that, I actually kind of felt embarrassed to do that again because it just didn't feel natural. And then we just did it. And I felt like everything was more light and we were back to normal. The pandemic didn't really matter. It did. But we could go on with our relationship. You know, the happy people we were. We could continue dancing, we could continue parenting, and we also have slightly different parenting styles. And that was okay. I just accepted that.

And then I started, “Well how can I show up better as a parent?” Then I started looking at the way Victor did things, you know, maybe he's got a point there. He's so patient. I can be a little bit more patient too. And so, when you realize that you can't change anyone else…

Bonnie: That's really the big thing isn't it?

Kate: Yes, I could talk forever about that, Bonnie. But that's the big epiphany I had; control what I can control.

Bonnie: You can't control other adults. Never can, never will. And I think, especially our intimate relationships, we think we could really get them to change and we would be happier if they just stopped doing that or started doing something. Even if you're a trained coach, like you and I both are, we still kind of get into that mode where we're like, “If only he wouldn't do this, then I wouldn't feel so upset,” or whatever.

Kate: Yes, if he had a different tone, if he reacted differently. But you know what, that's okay. That all can stay the same because I know, at the end of the day, we both love each other and want to be with each other. And these little tiny things, we're not in an abusive relationship. We don't have hugely different financial goals or family values. All that stuff aligns. It's just little things we have to work on, on a daily basis. And that's normal.

Bonnie: And one concept that I heard, Kate, that I was reviewing in prep for my talk is, I think sometimes we put a lot of pressure on our spouse to fulfil all of our connection needs, when in fact, if you really think about it – I don't want to say this is their job. But usually our spouses, what they fulfill for us is they're our lovers, they're there to love us and for us to love them, procreate – I'm kind of being a little detached from this.

And obviously you want more than just that. You want a connection. A lot of people say, “My spouse is my best friend.” But I think we get into trouble when we think, “And they should be type-A planning just like me, they should want to do all the things I want to do.” But you could have girlfriends for that.

Or let's say you're both physicians but Matt isn't, for example, and it's very easy for me to be like, “It would be easier if he was a physician because I can't talk shop with him. But I don't need to do that with him. I have plenty of other physician friends to do that with. And so, I think that's something we see a lot is we want one person to fill all of our connection needs.

For a lot of people, that's a spouse. And then also as women, I think a lot of us have a best friend and we put so much pressure on that best friend to, like, fulfill all these needs for us. Like, if she doesn't want to do this, we make it mean something bad. So anyway, that's kind of a tangent, but that's something I've noticed too.

Kate: I totally agree.

Bonnie: Yeah, so clearly not every couple is going to have this sort of real estate relationship you guys have. So, you've been doing this for a while. And so, how comfortable do you feel now in terms of your real estate knowledge. Do you feel like it's something you enjoy now, or you're just kind of along for the ride?

Kate: No, I love it. So, the Airbnb, I kind of took over doing all the messaging and stuff like this, setting the things up because that's kind of like planning. That's more of a hospitality service. And I totally felt comfortable doing that because I knew Victor had my back if anything happened.

And then in terms of the multi-family, Victor still takes the lead on that. He will do some syndications with some of our partners and do the raises. He helps do raises. And that's more active involvement in passive real estate, in the multi-family. But we also still do passive investing. And I'll go to the bank and I'll wire the money. So, I can still take a role in our passive multi-family investments too.

When it comes to running the numbers, I really, really trust Victor for that and I think that's just because that's what he does. He's a numbers guy. And his Excel spreadsheets are just crazy. So, he takes that over. And when it comes to the tax codes and stuff like that, he just studies them.

And when I took your course, I'm like, “I'm going to learn all this stuff so I can know as much as Victor.” I mean, that was like, I don't think I'll ever know as much. But I'll know the basics. But he also is really impressed that I took your course too because it forced me to actually sit down and look at the numbers in a different way than I do with him. Because we still sit down and look at the numbers occasionally too, where we figure out how I'm going to max out my retirement and concept work. And I still pay the credit card bills every month and go through our expense to make sure where the money is coming and going.

But when he saw me doing it on my own, because I was taking your course, he was pretty impressed by that. And so, not that he should be impressed, but I think it showed him that I really cared. Like, I was doing it on my own. and what I got out of your course was way more than just the numbers and stuff like that. It was really just like, “I've got a passion. There's been something missing from my life. How am I going to run with this new passion?”

Bonnie: And then boom, you've got a coaching practice now.

Kate: And then boom. And then I was just so inspired after I did that. I was like, “Victor, you need to do something like this. You need to sign up for a life coaching program too.” And he's like, “I don't have time for that.” And I'm like, “I am making time for you.” And that's what it is. I was like, “I'm going to take care of the kids. I'll pay for it.”

Like, I just knew, because our jobs as physicians are stressful. We see people dying. He sees three-year-olds, two-year-olds dying of their disease, of their brain tumors, of their spinal cord compressions and, like how does he process that? How does any physician process that? We're not given that outlet.

And so, I saw life coaching as a way for him to maybe just kind of realize something. So, when we signed up together for Sonny's program, it was the best. It was just like, “Okay.” We just kept riding the elevator higher and higher. And it's a constant work in progress. Not that every day is blissful. Every day, I have to remind myself and I have to coach myself and do the models and I still feel angry and upset and frustrated. But at least I recognize where those feelings are coming from now and I'm thinking in my thoughts more than, “Okay, I'm the victim.” I'm not the victim.

Bonnie: Yeah, I don't think I actually talked to Victor about his life coaching experience. But what you were saying earlier about Victor, because I do text him from time to time, just with money questions. And he always replies and he just knows his stuff. It's so awesome.

Kate: That's the thing. I'm telling you, once you befriend him and you ask him a question, he bends over backwards to make sure everybody has the answers because he's so passionate about just getting the right answers to physicians because the history is that we're fed all this nonsense by financial advisors who might have a different ulterior motive, right.

And so, he does that outside of work. He does that for his patients. And when you're doing that for everybody else, you need to give yourself something too. So, I think life coaching really helped. Because he's not a feelings guy. He's not going to sit down and talk to me about his feelings.

Bonnie: Awesome. Okay, well we talked about so much stuff. I'm so excited for everyone who's listening. So, why don't you leave us with one or two of your top tips to improve your relationship with your spouse?

Kate: Okay, one big thing that we didn't actually cover is when we talked about valuing your time, and a lot of people value their time. Because we go to work and we're worth a lot. We can make a lot in that hour or those two hours that we see those patients. But then we come home and we feel like we have to cook all the food, do all the dishes, clean the house, do the yard work, all these things. And is that really what's making you happy?

And if it's not, and if that's contributing to relationship strain or parental anger or something, then realize that you can hire people. You can hire people for much less money – I mean, you still want to treat them well, but much less than what you make in the hospital or the clinic. And you're providing a service. But you're also providing yourself time that you can invest in your relationship or being a parent or something else that you want to investigate.

So, I think valuing your time, that is a huge one. Physicians do not value their time enough. We might do a survey for like $20 and it takes us half an hour…

Bonnie: I agree with you. When I see these survey things and how much they pay, I just – this is not worth my time. And I do agree with you, it's so important to – I think that's one of the great things about having money, Kate, is to use it to buy back time so that you're not spending time doing mundane things and paying for a baby sitter to go on a date night. I'm also a huge believer about date nights as well.

Kate: Yeah, especially if it's a point of contention in your relationship. Just eliminate that together. And yeah, to reiterate the point, your spouse, your partner, whoever that is, that special person in your life, just, their job is to love you. That's their only job. Like what we both learned.

And ask yourself, in any situation where you find yourself getting irritated or angry or upset with your spouse because they reacted or said a certain thing, just ask yourself, you know, how do I want to show up for myself? Not even necessarily for them. But what do I need right now for myself? Things don't change overnight. But I think just being aware of our thoughts and your feelings really is key.

Bonnie: Absolutely. And I think one thing you kind of just insinuated there is when you said their only job is to love and vice versa. And I think maybe it was Brooke saying how there's a sort of movement where you talk about what your needs are and how they need to meet them and how that actually doesn't really work with relationships because it's like you're dependent on each other to fulfil those needs to be happy, versus the model of we both take care of ourselves in terms of our happiness and we get to just enjoy our time together.

It's obviously not clean split because, hopefully if you love them, you're going to want to do things for them et cetera. It's not like do nothing and just hang out when you want to type of thing. But you get what I'm saying.

Kate: Oh no, exactly. Like, if you need something then go get it, or go do it, you know. Give yourself the permission to make yourself happy.

Bonnie: Awesome. Well, Kate, thank you so much for being here.

Kate: Thank you so much for having me, Bonnie. This was so much fun.

Hey, if you're a woman physician who is ready to practice medicine on your terms, then you've got to check out my program Money for Women Physicians. It's part course and part coaching and 100% guaranteed to put more money in your pocket. Go to wealthymommd.com/money to learn more.

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Coming to Terms with Risk

33: Coming to Terms with Risk

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Coming to Terms with RiskSomething almost all physicians have in common is we naturally have a tendency to be risk-averse. This makes sense on so many levels because of how we were educated, and even the nature of our work. But the truth is, this hesitation when it comes to taking risks is exactly what keeps so many people from creating true wealth.

I've been thinking about this a lot lately because it's something I see coming up for so many of my clients. They want to make money and build wealth, but everyone knows a story of somebody who thinks they got swindled or lost money when they took a chance. So, what I want to do today is analyze the thoughts that stop us from taking the chances that might improve our lives, as well as help you come to terms with the possibility that you might fail on occasion, and that's okay.

Join me on the podcast this week to discover why physicians are so prone to being risk-averse, and how to learn to embrace the risk required to create true wealth. I'm sharing what we're really trying to avoid when we don't want to risk losing money, and why I choose to celebrate failures when I've taken a chance on something and it hasn't worked out exactly as I had planned.

What You'll Learn from this Episode:

  • How the traits that helped us become physicians can actually work against us when it comes to money.
  • Why I choose to celebrate my clients' failures instead of consoling them when they happen.
  • What we are trying to avoid by being risk-averse, besides losing money.
  • How the risk-averse stance of playing not to lose is not the same as winning.
  • What you can do to address your thoughts and feelings around taking risks and losing.

Listen to the Full Episode:

Featured on the Show:

  • Learn more about Money for Women Physicians where you'll learn the tools to make practicing medicine OPTIONAL.
  • Follow me on Instagram


Read the transcript Expand

Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 33. Today, we're going to talk about why physicians are so risk-averse. Now, this is something I've noticed for a while. So, this isn't anything new.

But I've been thinking a lot about it recently because I just see this come up over and over again among my students and clients in terms of their fear of making mistakes, their fear of losing money, and their fear of failure, even though logically, they can get that failing, making mistakes, and even losing money is part of your investing and wealth journey. Ultimately, it's the fear of making the wrong decision, which can lead to losing money. And, well, losing money doesn't feel good, does it?

And so, why is this so pervasive and where does it come from? One of the concepts I talk about with my clients is that traditional school, meaning kindergarten, grade school et cetera, it has literally trained us to believe that money comes from hard work, from studying hard, from getting good grades, getting more education.

I think a lot of us sort of believe that if you want to get a better job, if we want to make more money, we need more school, we need more knowledge. And so, becoming a physician is honestly a culmination of this training.

All of us went through a lot of school. We were the cream of the crop. We got really good grades. We knew how to get As. We went through a lot of school; not just four years of college, but four years of medical school, and then anywhere from three to seven plus years of residency training.

Now, these traits that got us to where we are, they're not bad. But they can often work against us when it comes to money. Because traditional school teaches us that mistakes, that failure is bad. When we get an F or another bad grade, I guess anything below an A is probably not good for a physician-to-be, right? It's not good.

And when we're young, as students, we think there's something wrong with us. We often collapse the grade with our ability, our self-worth, our confidence. All failing means is that you didn't get the result you wanted. It has nothing to do with your value, your worthiness, and your ability. The problem, I think with traditional school, is that it doesn't prepare you for real life and it definitely doesn't prepare you for business if you're someone who wants to start a business because failure is required for success.

Same thing for money and growing wealth. Failure is required for building true wealth. We need to celebrate failures. Can you imagine if teachers, when we were in grade school, celebrated the Fs in the classroom? But they don't. They only celebrate the As.

You know, in entrepreneurship, one of the first things we celebrate is our first bad review. I'm totally serious. When a fellow entrepreneur comes to me upset about their first bad review, maybe it was a comment on their social media, or maybe even an email, of course, it can be upsetting. They think something is wrong. They think their business is wrong. They think they are wrong.

But I actually don't console them. I actually say, “Congratulations. This is a huge milestone. This means you are reaching enough people for people to have an opinion about you. In fact, the bigger you become in business, whether it's a business like mine or a physician practice, the more negative reviews you will get. It's just part of the game. It's only a problem if you make it mean something about you.

Okay, so let's bring this back to money and investing. As I said before, so many of us are afraid of losing money if we make a mistake because we have equated losing money as making a mistake or a failure, and remember, failure is bad and should be avoided at all costs.

And I understand this. It seems logical to think this, right? But this type of thinking will not produce financial freedom. Far from it. I like to tell my clients that you're either always winning or learning versus winning or losing.

If we all truly believed that the more we fail, the more we will succeed, we would all be lining up to fail and to fail a lot and to fail big. But we aren't. we are actually lining up not to fail. We are playing not to lose versus playing to win. I'm going to say this again because it seems like I'm saying the same thing, but there's a subtle and important difference here.

Most of us are lining up not to fail, which is playing not to lose. And that is very different than playing to win. And this is not just a distinction that's important for money, but for life in itself.

How many of you are playing not to lose because you're so afraid of losing or failing? The problem with playing not to lose and being so risk-averse is that you'll never experience what it's truly like to win and live your best life. And what's so bad about losing or failing anyway? Like, really?

Because when I coach my clients on this, when we really delve into what they're truly afraid of if they fail, if they lose, whatever you want to call it, it all comes down to feeling horrible; feeling feelings like shame, maybe deep embarrassment. And these are big and negative emotions.

Notice how we go to great lengths to avoid feeling things like shame and embarrassment. I often joke that, with coaching or thought work, whatever you want to call it, it's actually really feeling work. I call it emotion school. And I often joke with my clients that traditional school failed to teach us how to manage our emotions, AKA emotion school. And it also didn't teach us how to manage our money, or money school.

And to be honest, it really comes down to this. The worst thing that can happen is feeling something really bad. Meaning the worst thing that can happen is a feeling. And, so what? Why do we go to such great lengths to avoid feeling a feeling?

Now, in coaching, this avoiding a feeling, we call this buffering. And let me just backtrack a little bit because there are four ways to deal with a feeling. And also, many of us think that feelings just happen to us. And so, you may have heard me say this in previous episodes, but just in case you haven't, thoughts create our feelings and feelings create actions and actions create results.

And so, how many of us think that feelings just happen to us? You know, if we're feeling bad about ourselves because someone said something. That gives all power to something else, to something external. We actually do have way more control over our feelings than we think we do.

Okay, so back to feelings. There are four ways to deal with a feeling. Number one, you avoid it. We call this buffering. Everyone buffers. I buffer. Here are some common ways we buffer. We go on social media, meaning we scroll Facebook or Instagram. We get a glass of wine. We eat a little too much, that cupcake. We watch Netflix.

Now, none of these activities in themselves are bad, by the way. It's more of why we do it that we need to examine. Okay, so that's avoiding a feeling or buffering. We've all done it. Number two is we resist the feeling, which is different than avoiding, but it's a subtle difference. Meaning we're using sort of our willpower to kind of resist the feeling. Kind of like when you're trying to lose weight, you see that mac and cheese calling for you and you're literally using your willpower to resist giving into the urge to eat the mac and cheese.

I picked mac and cheese because, honestly, I have a really hard time saying no to mac and cheese. If it's on the menu at a restaurant, for example, I almost always have to order it. Anyway, I digress. So, that's resisting.

Okay, now we've talked about avoiding and resisting, number three is to react to the feeling. And so, this will depend on what the feeling is. So if you're feeling angry, reacting to the feeling is to yell. When I'm looking at mac and cheese and that feeling is basically the desire to eat that mac and cheese, reacting or giving into that feeling is to eat it. That's number three.

And then, the fourth way to deal with a feeling – this is where most of us do not know how to deal with – is to simply allow and experience a feeling. Yeah, you can just literally sit there and allow that feeling to run through your body.

None of us were taught how to deal with our feelings. And if we really think about the world – and I'm not going to go into a whole spiel about drugs and alcohol, but the reason why so many people end up drinking, end up doing drugs or other types of addictive behaviors is because they are literally avoiding feeling their feelings. They're numbing their feelings, so to speak.

Because no one taught us that if we just allow a feeling – and this is not just about bad feelings, by the way, because if you're listening to this, you're probably avoiding feeling good feelings too because I know many of us do not allow the feeling of accomplishment, like truly allowing that feeling, that positive feeling when we accomplish something, when we did something great, we often sort of pretend like it didn't happen or just kind of avoid it because that also feels uncomfortable.

So, this is not just about bad feelings. But let's define what a feeling truly is. We define it as a vibration in your body. So, thoughts create feelings, and then the feeling creates a sensation in the body. A feeling is not a physical sensation, which kind of is the opposite, meaning there's a physical sensation like pain, which then travels to our brain and then triggers a thought. Because then that pain or that physical sensation is a circumstance and then we have a though about that sensation.

So, back to feelings. A thought creates a feeling and then the feeling is a sensation or even a vibration in our bodies. And so many of us do not allow that feeling to, I like to call it, percolate. Kind of let it just sit in our body. And then to allow it to dissipate. Because all feelings are temporary.

I would say about 10 years ago when I was a derm' resident, I remember talking to a friend of mine. His name is Chuck. And he's a therapist. Maybe it was more than 10 years ago because I was in my early 30s. But anyway, I remember asking him, “What's something you wish all adults knew or something you see come up all the time in your practice?”

Because I was just kind of interested in how he talked to his patients. And he said, “The one thing you have to realize or learn as an adult is that all feelings are temporary.” And that really stuck with me. And it wasn't until I learned more about thought work and coaching, where that sort of really hit home. Like, truly, all feelings are temporary, even the really bad ones.

And if we really understand this, then we wouldn't have to or want to go to great lengths to avoid the feeling. Because I'll tell you – and you guys know this already from your life experience – avoiding a feeling doesn't make it go away. It just keeps coming back and then we keep having to buffer.

The only way to truly allow the feeling to literally run through you and dissipate is to just allow the feeling. Now, this is something I teach inside my program and this is something a lot of my clients have trouble with because it's such a new concept. And we've spent so much time buffering, resisting et cetera that we don't even know what it's like to just sit with a feeling.

And this is something that I have trouble with. And I like to joke that it's because I'm Asian. Because, you know, in our culture, it's not like normal to be emotional. And so, I can make fun of myself around it, but I do think it's something that a lot of us have trouble with, with honestly just feeling our feelings.

And so, that was a whole thing about feelings. But that's really what failure, mistakes, et cetera, we don't want to feel bad about ourselves. The problem is that losing money, failing, making a mistake, whatever we want to call it, it is part of the game of making lots of money with investments. Whether it's the stock market, whether it's your business, and whether it's real estate.

Losing money does not mean you are bad with money or investing. It does not mean that investing doesn't work. I hear so many people saying that they have friends who lost money on real estate, et cetera and then they make it mean, “It doesn't work. It's not for me.”

However, they're forgetting about all the people who are making lots of money and who are every successful with real estate, right? All it means is that that thing didn't work out. The real work, like I said, you're always winning or learning. The real work is spending the time to really examine, why didn't it work? What can I learn from this? Versus beating yourself up, which is kind of the default thing that many of us do.

Now, beating yourself up seems useful. I know that sounds strange to hear, but hear me out. It seems useful and almost necessary. Like, we deserve to feel bad because we made a mistake. But I just want to tell you that that is 100% optional and it's 100% not useful. Because when you are beating yourself up, you cannot do the work to learn from the experience because you're too busy feeling bad about yourself.

If you actually think about it, beating yourself up is what I call a self-indulgent emotion or activity. And there's a whole list of things that I consider self-indulgent, which I'll talk about in another episode.

And so, one thing I do all the time inside my business is to do a full evaluation, whether it's from a launch of selling a course or with a coaching client if it didn't go the way I wanted it to.

Now, my brain automatically wants to go into how I messed up, how I'm not good, how all the things. The only difference now is that I might still indulge in that. I'm only human after all. But now, I take the time to learn from that experience.

And what I have learned over time, doing this over and over again, is it comes down to trusting yourself and to have your own back. So many of us are just not that nice to ourselves. You know, I always work with a one on one coach and my current one is subtly pointing out to me how I take little jabs at myself.

I'm less mean to myself than I was like two years ago. But I'll still say little things like, “Yeah, but I'm kind of lazy and, you know, but I can't be bothered.” And these sound like nothing special, like they don't really mean anything. But my coach will point out, you know, “It's still not very nice to yourself.”

And so, I'm still beating myself up maybe a little bit nicer than I was two years ago, but I'm still doing it. I'm still human. I'm still learning. So, how can you reframe your prior money mistakes, especially if you maybe took the plunge to invest in real estate or maybe try your hand at individual stocks and it didn't work out, meaning you lost money?

Or I hear about physicians that do something and feel like they got swindled. Remember, all of those thoughts about that experience are optional. And I just want you to ask yourself, is it useful for me to keep thinking this about that experience? What am I truly committed to when it comes to money and wealth and freedom?

So many people want that quick fix, that thing that's going to make them rich quickly. It's just human nature. We're impatient. And I think the quicker you understand and truly get that the path to financial freedom, the path to doing what you really want in life without regrets, it's going to take lots of fails. The sooner you get onboard with that, the sooner you can get to where you want to go.

Okay, I hope you learned a lot from this episode and I will see you next week.

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The Abundance of Frugality with Dr. Disha Spath

32: The Abundance of Frugality with Dr. Disha Spath

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The Abundance of Frugality with Dr. Disha SpathMy guest this week is Dr. Disha Spath. You may know her as the Frugal Physician. This begs the question, what are Wealthy Mom MD and the Frugal Physician doing on the same show? Well, you're about to discover what might be some surprising common ground.

A lot of people tend to conjure an austere, deprived image of what their life would look like if they were more frugal. But Disha is here to discuss how frugality and wealth can actually go hand in hand, enjoying life while reaching your financial goals quicker.

Dr Disha Spath is a primary care physician based in New York State who managed to pay off multiple six-figure student loans in just a year and a half. Just like me, she loves educating women physicians on money and how to live their best life. And she does this through selective frugality and common-sense investing.

Tune in this week as Disha shares with us what being frugal means to her, and why there is so much more abundance in frugality than you might think. Disha is sharing how to be frugal and live a wealthy life without depriving yourself, and her top hacks for forming healthy habits around spending and saving.

What You'll Learn from this Episode:

  • What being frugal means to Disha.
  • The misinterpretations out there as to what frugality is.
  • Why frugality and wealth can go hand in hand.
  • Where being frugal differs from being stingy or cheap.
  • The importance of focusing on your spending as well as your income and investments.
  • How you can be frugal and wealthy without feeling deprived or compromising on quality of life.
  • Disha's top hacks that will help you develop better habits around money and take the mental energy out of saving.

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Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I'm your host, Dr. Bonnie Koo.

Welcome to episode 32. Today, I have a special guest. I have Dr. Disha Spath. You may know her as the Frugal Physician. Now, you might be wondering, what is the Frugal Physician and Wealthy Mom MD doing in the same room?

Well, I'm so glad you asked. You're in for a treat because you're going to learn what frugality really means and how frugality and wealth can go hand in hand without feeling deprived. We really delve into the true meaning of frugality and what it doesn't mean.

Now, Dr. Disha Spath, the Frugal Physician, she is a primary care physician and she's based in New York State. And she paid off multiple six-figure student loans in a year and a half. And so, we're very similar in that we both love educating physicians, women physicians about money and how to live their best life. And she does it through selective frugality and common-sense investing.

So, anyway, let's get on with the show.

Bonnie: Welcome, Disha Spath, to the podcast.

Disha: Thanks for having me. I'm so excited to be here.

Bonnie: So, I bet people listening now are like, “What is the Frugal Physician and Wealthy Mom MD doing in the same place?”

Disha: Yeah, like we definitely have what seem to be kind of opposing theories. But I don't think they are.

Bonnie: Yeah, so I think this is going to be a super-fun episode. So, what I thought we could do is just talk about what frugality means to you and I'm going to tell you what I found on the internet as to what frugality means because I think there's a lot of misinterpretation of what frugal means. So, I thought that would be a good place to start.

Disha: Yeah, absolutely.

Bonnie: Tell me what your definition of being frugal is.

Disha: Being frugal, to me, is making intentional spending decisions to get the most value out of whatever you are spending on and meeting your final goals, or being wealthy and building wealth.

Bonnie: Yeah, so I think we should first clarify that you are interested in building wealth too.

Disha: Right, exactly. I think there are different ways to build wealth and there are different tools we can use. Investing is one of them. But just focusing on investing and not the spending side can sometimes get us in trouble. Not trouble, it might just slow down our progress a little bit because if we focused on the spending side, we'd have more money to invest and build wealth even faster.

Bonnie: I totally agree with you. I think identifying your cash flow, budgeting, whatever you want to call it is kind of an overlooked area because it's not sexy.

Disha: Right, saving money is not very sexy to talk about. But honestly, I think there are different kinds of people and there's a certain segment of people that love talking about how much they save money. And I happen to be one of them.

Bonnie: Well, I definitely am of the philosophy, you know, the more cash that you can identify to put towards investing, which you can do through tools like frugality, then the quicker you can build wealth. So, I'm totally on board with that. And I actually started revisiting our spending recently after kind of taking a hiatus. And there are definitely areas that we can improve on without decreasing our quality of life. I think a lot of people are afraid that if they embrace frugality, that they're going to have to live differently.

Disha: Right, exactly. I think a lot of people think being frugal is just, they shut down. And I was the same way. I didn't want to be frugal because I thought I deserved not to be frugal. Because I worked so hard for so long, I shouldn't need to be frugal anymore. And I think that's a real block in people's thinking that holds them back a little bit because you deserve to get a good value. You deserve not to throw your money away. Your kids deserve to have a stable financial future. You deserve not to ever have to worry about money.

The thing is, when you don't worry about money, when you stop, when you don't think about the money, the money controls you. But when you decide to control your money and take a look around and look at what you're spending and whether you're spending well or not in certain areas, that's when you are controlling your money and making it work for you and it's not controlling you.

Bonnie: Yeah, I love the way that you describe that. So, I looked up what frugality means online, the internets. So, let me tell you what it said. So, I found two definitions and I want to see what your thoughts are. So, the first definition I found, and I think this was from Merriam Webster, says, “Characterized by or reflecting economy and the use of resources.”

Disha: I like that.

Bonnie: The second definition said, “The quality of being frugal or prudent in saving, the ack of wastefulness.”

Disha: Yeah, I like all of that. That's awesome. I agree. And you know, the reason I agree is the reflecting economy of the use of resources, I love that because a lot of times, when you make frugal changes in your life, you're also ultimately saving resources of the planet. And I really love how being green, being frugal sometimes go hand in hand.

For example, we just decided to switch from using paper towels to using cloth napkins. And I'm so happy about that change because not only are we saving the $20, $25 we were spending on paper towels maybe every month let's say. Not only are we saving that money. We're also not ultimately using up all the resources that it took to get that paper towel made and then transported to me and then processed afterwards. Because you can't recycle paper towels. They create too much of a mush, so you have to trash them.

And, you know, all that energy in the world, I think I'm contributing just a little bit to helping save some of the resources that our planet has as well. And it's super-frugal because now I'm saving that money that I would have been spending otherwise, and that makes me feel good too.

Bonnie: That's an interesting point. So, I think I definitely had a different interpretation of frugality, you know, before I started doing research for this episode that we're doing right now. And I love that you agree that frugality also encompasses saving the planet, basically. So, we use cloth napkins as well.

Matt's not 100% onboard with using them. But we're definitely decreasing our use of napkins because we have them. And he's getting more into them. This is kind of an aside, but the napkins I ultimately bought were from Crate and Barrel like a year ago. And they were real effing hard initially and I remember being disappointed. Like, “Oh, I bought the wrong ones.” But over time, thankfully, I think after washing them several times, they've actually gotten softer. So, I think he doesn't mind using them now.

So, I think a lot of people, initially, will feel like, “Oh, but they're more expensive.” But it's just a onetime cost versus having to keep buying napkins, paper towels, whatever you want to call it, right?

Disha: Exactly. There's an upfront investment, but then you never have to buy those napkins, at least not regularly, ever again. You just replace the ones that you lose or can't use anymore. But yeah, we just wash and reuse. And it also feels more luxurious, interestingly.

Bonnie: Oh, I totally agree.

Disha: Yeah, to have a cloth napkin at every mean, no matter if you're eating mac and cheese or sitting down at the table or whatever. And then cleaning up with – I have surgical towels. I ordered a bunch of huck towels from Amazon and it was like $25 for an entire box of 50 huck towels. And those will last us forever. I mean, I have like a huge stack in my laundry room and then I have some that I keep in the kitchen. I just keep replacing them as we use them. It's great.

Bonnie: Yeah, I have something similar. I bought these blue microfiber towels to replace using paper towels to, like, wipe the counter. Again, Matt still prefers paper towels. I use the blue towels. He uses the paper towels. But I figured, overall, we're probably reducing our impact on the environment.

Disha: Yeah, reducing that consumption and also saving money. It's a nice side effect.

Bonnie: Yeah, okay, awesome. I'm glad we're in agreement there. So, let's talk about what frugality isn't.

Disha: Okay, so hate it when frugal people get on their high horse and start judging everyone. I feel like that's more being cheap because frugality isn't a set thing for anyone. I think frugality is the economy of resources, or meeting your goals by spending your money more thoughtfully and looking for value. And value is different for everyone, depending on your perspective. Some things are of great value to some people and not to other people. Frugality is not one thing. You cannot judge other people for their spending decisions, I don't think. I don't think you should.

Bonnie: Yeah, so people definitely judge other people for how they spend their money and there are some – I don't know if I'd call them frugal people but – people who spend less or they think they're spending their money better than you are. That's kind of the sentiment, right?

Disha: Yeah, I hate that. I think there's this vision of someone that is frugal that lives in a tiny house and drives a bicycle everywhere and doesn't buy new clothes. And I think that is one version of frugal. But I think everyone's frugal can be different. Depending on different goals, how quickly you want to save money and what you want your living expenses to be, I think we can be frugal at every income level and every living expense and every goal level.

Bonnie: Yeah, that totally makes sense to me. Since you mentioned being cheap, let's talk about being stingy and being cheap and how these are not synonymous with frugality. Because I think a lot of people, including myself initially, thought that being frugal meant you had to be stingy or cheap or just – I'm Korean, and so I have these images of the Asian markets where you're trying to – what's the word? It escaped my mind. You basically try to negotiate…

Disha: Haggle.

Bonnie: Yeah, haggle on the price, you know.

Disha: Okay, so I think haggling is different because in those markets, that is the standard, that you are expected to haggle the price down and say, “No, I'll pay you $1 for this thing you want to charge me $50 for.” And then, “If you don't give it to me for $1, I'm walking away.” And then that person is chasing you down the street and, you know. So, I'm like, I totally get that. I'm from India and my mom's sisters were excellent hagglers. I mean, my god, they were so aggressive.

Bonnie: I've seen it in action. It's crazy, yeah.

Disha: Yeah, and I honestly, I let that loose sometimes when I'm negotiating buying houses and stuff. But people tell me I can be a little intimidating. But I generally don't do that.

Bonnie: You're not going to Walmart and haggling with the workers there.

Disha: The standard is different in this country, thankfully. Because it is tiring, you know. It can be fun. I honestly find it a little fun. But most of the time, it's pretty tiring and not necessary.

So, being cheap. What makes you cheap? Well, I think being cheap is you're trying to get the lowest price. Now, there's a difference between cost and price and value. And I think in my mind, what I define as cheap is someone that only looks at the cost of something or the price of something, but they're not looking at the value.

So, the price of something is what you pay upfront. The cost of owning something is what you are going to end up paying over the lifetime of that product. And value is more subjective. It's, how much is it a good thing?

So, for example, you buy a $5 pant, you know. The price of that pant is 4%. The cost of owning that pant is, well, buying a $5 pant and then washing it or whatever, upkeeping it. And the value of that $5 pant is, well, it's going to give you something to wear and it's going to keep you warm, but the value of a $5 pant, for this particular $5 pant, it's not of great value because it is made of cheap materials that's going to break down on you and the colors are going to bleed all over the rest of your clothes when you wash it. And then the cost of buying that pant actually goes up a lot because now you're going to have to replace your entire wardrobe because it's going to be blue.

Bonnie: I love just that visual. I actually love that you chose clothing as an example because I have sort of changed how I see buying clothing and I'm more of the – I would rather buy a higher quality top, pants, jacket, whatever that will give me longevity.

Disha: Yeah, I'm totally with you on that too now I used to buy more cheap clothes. But I'm definitely of the mindset now that, you know, I'm going to buy something that I need to buy once and that I can wear for years to come and I don't have to spend money on that again.

And I do think that there are ways to buy nice stuff, the high-value stuff for a good price that is not going to break the bank and it's going to last you forever. Things like the synthetic material, you know, dresses that are made of the synthetic material that seem to never fade and never get bad, I think that's of really good value for me. And I tend to buy things that are machine washable. I hate buying stuff that's dry-clean only.

Bonnie: Same here. It's just a pain in the butt.

Disha: Yeah, it is.

Bonnie: And money.

Disha: It is so much money. And yeah, it's a pain in the butt. It takes up so much of your life to go and drop it off. And then, I'm really bad with logistics like that. So, I try to keep it pretty low-maintenance. And I usually, like the ice clothes that I buy, I don't dry them in the dryer because I feel like that takes the life out of them. So, you know, hang dry.

And honestly, I think you can get some really good value if you buy some of the used stuff from rental subscription companies, like Rent the Runway or Le Tote. And they sell some of the stuff that's been in rotation for a while for really good prices in some of their sales. So, you can get designer clothes to have.

Bonnie: I guess the good news is, with COVID, there's really no need for new clothes right now.

Disha: Yeah, that is true. It's kind of sad, but yeah, it's true. I did buy some new scrubs.

Bonnie: Yeah, well I got new scrubs last year. But I bought FIGS, what are obviously not super inexpensive. But they're pretty high-quality. I've washed them several times and they still look new. So, I'm pretty happy with that.

Disha: Yeah, I bought some FIGS too. We are not sponsored by FIGS here today.

Bonnie: Not yet…

Disha: Yeah, you might want to work on that. But no, I love my FIGS too. They're great. And I think it's so important because I'm washing my scrubs all the time right now after every shift.

Bonnie: Yeah, and I just feel like, you know, I'm not wearing scrubs right now. But I just feel like, if I'm going to be wearing scrubs, I kind of want scrubs that are, A, comfortable, and B, you might as well look a little nice if you're wearing them all day.

Disha: It's true. It makes you feel a little bit better, I think.

Bonnie: Yeah, instead of those machine scrubs…

Disha: The elephant scrubs. Why don't we make – first of all, I felt like when I was training, doctors weren't allowed to wear the nurse scrubs. You know what I'm talking about, the fitted women scrubs? I always felt like I had to wear the elephant scrubs that are out to five times my body width. What's with that?

Bonnie: I don't know. I just remember, when I was in medical school, we got like a scrub code. And I guess al hospitals – I don't know, where I trained, they would just come out of a vending machine. And I don't think you can pick the size. So, you just got whatever was available.

Disha: Yeah, that's right.

Bonnie: I guess the good news is, since you and I aren't huge people, they would all fit us.

Disha: There is that. But we could probably share one.

Bonnie: So, let's talk about frugality and how it fits in with abundance versus scarcity mindsets.

Disha: Yeah, so I find this interesting because I think frugality can come from both sides, you know. Sometimes, when you start saving money, when I start saving money, I get into this mindset that's like, I just don't want to spend money on anything. Like, I have this goal and we're just not going to spend money on anything and we're going to just start building up cash and building up cash.

And I do get into this scarcity mindset sometimes of there's not enough money. We need to do this faster. We need to get to financial independence. And I think the scarcity mindset of feeling like there's not enough money ever is really bad for us, really unhealthy.

And there is a way to come to frugality from an abundance mindset of there is enough, there is plenty, in fact. We don't need anything else. If we need something, we do it intentionally. We buy it intentionally. We don't deprive ourselves.

And the way to do that is to be really clear with our goals. Instead of just saving for the sake of it, to not deprive ourselves, we just need to have a month goal. And I think this is why budgeting and making a spending plan is really important for me personally. It keeps me away from that scarcity mindset of never spending money. Because we have our goal spend on each category and we have our end of the month savings that we want to hit.

So, we put the goal spending for each category based on our end of the month savings goal and then that's it. So, I know that I have $500 right now to spend on the house, or something. I have $1000 I can use for shopping for whatever. And so, that gives me more peace of mind and keeps me out of the scarcity mindset in that I know that we are still meeting our goals, so I don't have to hold onto every single penny and I can still enjoy today.

Bonnie: Yeah, so I actually love what you just said because I also agree with you that having that monthly spending plan actually gives you a lot of freedom. So, it's funny. I have a tendency to overspend and I actually haven't examined – usually, overspending is from a scarcity mindset. But for me, the budgeting that I do monthly is to make sure that I don't overspend. Because I see things, I'm like, “Oh, that looks nice. I want to buy it.” And now I've trained myself and I tell myself, this is what I can spend on whatever I want. Because I want that freedom to just buy something because I want to, right? I've just planned that money into my budget so I can do that without worrying about overspending.

Disha: Bonnie, I had no idea you had a budget.

Bonnie: Yeah, I use YNAB.

Disha: Yeah, that's right, I did know that. Awesome.

Bonnie: Yeah, but I took a break for a while because I'm like, “I don't need to budget.” I definitely got a little, I don't know if arrogant is the word, or just didn't want to deal with it. Probably a bit of both. But then I just didn't have the same connection to my money when I wasn't keeping tabs on it. You know what I mean?

And so, I just honestly reexamined it recently and also, I had to kind of retrain myself on YNAB because I wasn't using all the tools effectively. Because you can actually set monthly, yearly goals, et cetera. I actually worked with a YNAB coach very briefly just to make sure I knew how to use it. But yeah, it was really eye-opening because you can just easily identify the areas where – it's not even like spending too much, but we're not being – I guess frugal is the right word. We're kind of just being wasteful for no good reason except for just because we're lazy and I didn't want to deal with it. You know what I mean?

Disha: Right, there's so much convenience spending out there. That's what I found when I first started keeping my budget too is that I spent a lot on just not wanting to think about it. Like, I didn't want to think about packing a lunch. So, I spent so much money on getting coffee on the way to work and getting coffee at work and then eating at work. And it really just took five minutes of my morning to pack a lunch. And then, all of that spending is done.

Bonnie: Yeah, so I think I'm still working on things. But it's been really good. And I really – we're both money people. I like looking at my money and I like to know where things are going. And especially since we're really trying to open up as much cashflow as possible to invest in real estate, the more I can optimize and not be wasteful on our spending, the more money I can free up to put into the real estate investing.

Disha: Exactly, yeah. Because if you think about Robert Kiyosaki's, like, cashflow and maps and stuff, he talks about cash coming in and cash going out and the rich dad poor dad. The poor dad, the cash comes in and then it goes right back out towards liabilities and expenses. And if we can keep some more of that cash to create that wealth circle, where the income coming in goes into our assets and then makes us more income and more assets and more income and more assets, the more money we can get to go into that circle, the better, the faster we reach our goals.

So, yeah, I think fighting frugality is coming from this mindset, this mindset block, that you just don't want to deprive yourself. But when you embrace frugality or just embrace being a little bit more economical, you make so much progress. And that's what I preach. It's like, don't fight it. It's not bad. And it's just a tool.

Bonnie: Yeah, I wonder if even just using different words – because like I said, some people hear frugal and they're like, “Oh my god, I don't want to look at this.” And so, I don't think I use the word frugal. I think I say more like optimize, examine your spending, like do I really need to do this? Do I need to do that?

And there are some areas where we're spending a lot of money. But to me, it's worth spending that money for now. And I also tell people, there are different seasons in our lives. So, just to give an example, like, there was a season in my life where Jack was a little baby, I had just started going back to work. And so, I was willing to pay more for the convenience of food preparation.

But now that my life has sort of settled, I have more time. Then it's like, that's not worth paying for. So, I always – people get kind of stuck like they have all this stuff going on. I just say, just reexamine it in three, six months. Like, our lives are constantly changing. And so, there will be some seasons where you may spend more in a certain area and that will be worth it for your peace of mind. But then, the following season it might be a slower time and then you can take some more time to kind of optimize how you're spending your money.

Disha: Absolutely, yeah, and that's why coming back to the budget and coming back to your cashflow and just reevaluating that every month is so important, so useful. Because you can make those decisions very actively and thoughtfully rather than just continuing the habit just because.

Bonnie: Alright, so, let's finish up by – I want to hear your top frugal tips, or frugal hacks that you think might be useful. My biggest one is – my top frugal hacks revolve around building good habits and automating savings in our lives. Habits are a really great tool. If we just do one thing better every day and make that a habit, we can have exponential increase in the results and goodness that come from it.

Because once we establish it to be a habit, you no longer have to think about it. It no longer requires mental energy on your part. It just becomes a saving habit. So, what I like to do saving habit-wise, packing a lunch. I already mentioned that. Packing a lunch saves you so much money. Packing snacks and taking it to work.

I mean, right now, a lot of people aren't going to work. But as people start going back, that's one way to automate the savings in our life. That's $10 saved every day.

And then shopping, you know, choosing where you shop, choosing how you shop can save you a lot of money too. Like, for example, doing grocery pickup for me was really important in saving money and making me stick to my grocery budget because I fall for placement. I fall for marketing really easily. So, I end up doing impulse spending a lot when I go into a store. So, I just don't go into a store anymore, you know. I just pick it all up.

Bonnie: And you save time.

Disha: Yeah, it's completely efficient and I save money and save time. It's a win-win for me. So, that's number two. Number three, you know, trying to analyze where you're spending money every day and decreasing that somehow. So, whether it's food, whether it's shelter – I think shelter is a big one for a lot of people, you know. We tend to get huge, huge, humongous houses that require a lot of upkeep. And trying to moderate that build so much just automatic savings into our budget.

So, I think that shelter, and then of course transportation. So, transportation is a big category for most people. But I feel like people end up spending so much money on cars for – I don't know why. I don't understand it.

Bonnie: You're not a car person, obviously.

Disha: I'm not a car person.

Bonnie: I'm not a car person either. So, I think we all have our vices in terms of areas we tend to throw a lot of money. I'm definitely not a car person. I don't care about the car. We happen to have a nice car, but that was mostly Matt's choice. If it was up to me, as long as it turns on and drives and has AC and the windows go up and down, I'm pretty good.

Disha: You know, I'm very big about not judging people for their choices. And that's buy the car that you want. However, do recognize that cars are not really great investments. They do depreciate in value. So, they are best bought if you can buy it in cash, you know.

If you can afford to buy it in cash, then have at it. but if you can somehow be more economical about it, that's a really great way to build in some savings into your budget, by not having a car payment, not having a lease payment, and having a car that doesn't require a ton of upkeep, doesn't require a ton of foreign parts and specialized people to work on it. It does save you a lot of money.

Bonnie: That's actually one of the reasons why we picked an Acura, because it's basically a Honda and it's reliable and doesn't break down, blah, blah, blah. But yeah, our gas bill has plummeted because we're not really driving. I think we fill it up once a month, if that, at this point.

Disha: Yeah, what I love about this COVID pandemic, which I feel like no one has ever said before, “What I love about this COVID pandemic…” what I do love about this whole process is that we are all in this really interesting experiment in our lives where we're finding all the places that money sort of leaked out of our pockets, you know. And all of a sudden, people are realizing that they're saving so much more. And if we can utilize this time to realize all these ways that the money was going out of my pocket is now staying in, how can I sustain that in the future?

Bonnie: That's such a great observation.

Disha: I mean, if people could learn so much about their spending habits and then make those into good habits going forward. This is such a great opportunity as things open back up, to just really notice right now, why are you saving so much money? Because those are the things that you should really watch as things get going again and try to optimize and try to save money in those categories, you know, later on down the line.

Bonnie: Yeah, for sure we're saving money because we're not traveling. I don't think that was a super-crazy expense. But eating out was definitely a big expense for us.

Disha: Yeah, for a lot of people. And as things open back up, I would not advise everyone to stay inside. It's not healthy, you know. As things get better, just build a budget. Be intentional about it say, “Okay, so how much do we really want to spend or can we spend on going out?”

So, if it's $300 a month or $500 a month or whatever, $1000 a month, just set that foal and then watch it. And it's going to give you the freedom to do that without breaking the bank and still meet your goals and you're going to feel really good about yourself and about your money.

Bonnie: Awesome. Well, this was so much fun to have you on the show and talk about this.

Disha: Thanks, Bonnie. I know, this was really fun. Thanks so much for having me.

Bonnie: Yeah, well thanks so much for being here and we'll see everyone next week.

Disha: Alright, thank you.

Hey, if you're a woman physician who is ready to practice medicine on your terms, then you've got to check out my program Money for Women Physicians. It's part course and part coaching and 100% guaranteed to put more money in your pocket. Go to wealthymommd.com/money to learn more.

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Money Envy

31: Money Envy

Apple Podcasts Spotify Stitcher

Money EnvyOver the course of my professional life, envy is something I’ve experienced from time to time. I’m sure we all have. When we’re feeling envious, it can lead to some pretty negative thoughts; first judging the other person and how they make or spend their money, then judging ourselves. And this never leads to us feeling great about our own or anyone else’s achievements.

The good news is that envy is a perfectly natural place for your brain to go. We’re wired that way, so it’s nothing to be ashamed of. And the even better news is that having been through this process myself on numerous occasions, I have a few tips and strategies for how to recognize when you’re in this place, and what you can do to move through it in a helpful way.

Join me on the podcast this week and discover how to turn your money envy into inspiration. I’m sharing how to question your thoughts when you find yourself in this place of envy, put other people’s lives and achievements into perspective, and show yourself compassion in the process.

If you’re ready to take control of your money and practice medicine on your terms, you need to check out Money for Women Physicians. Click here to learn more!

What You’ll Learn from this Episode:

  • What envy is and why it is ultimately unhelpful and disempowering.
  • How to be onto yourself when you’re experiencing envy over what somebody else has achieved.
  • Why judging yourself for feeling envious of someone is not serving you.
  • How to turn envy into inspiration.

Listen to the Full Episode:

Featured on the Show:


Read the transcript Expand

Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I’m your host, Dr. Bonnie Koo.

Hey, everyone. Today, I want to talk about money envy and money judging. So, I listened to an episode recently that was all about envy. And then, it really just got me thinking about how I’ve envied other people about their money. And also, that so many of us judge other people for how they spend their money and how they use their money, or even how they make their money. And I think this is such an important topic to talk about.

So, we’ve all been there, right? So, first, I think we need to distinguish between jealousy and envy. And this is something I had to look up. And so, this is what the Google told me about envy. So, it is a noun and envy is a feeling of discontented or resentful longing, aroused by someone else’s possessions, qualities, or luck.

Now, here’s the problem with envy. When we’re feeling envy about someone else’s life, that means we’re focusing on their life versus ours. Which then leads to us neglecting our life. It’s also a waste of time. And also, we end up choosing to feel discontentment over joy in that moment.

Now, I think many of us have the awareness that this is not a good feeling. And maybe some of you even feel bad for feeling envy towards a person. Like, you’re a bad person for even thinking this.

So, first, I just want to give you permission here. This is totally normal for your brain to go there. It’s just how our brains are wired. You are not a bad person if you see someone be successful and then feel envy, or see someone who has more money and feel envious about their life.

And let me confess here a bit. Honestly, this is where my brain goes to almost by default. And this is what my brain does if I’m not onto it. Meaning if I see someone have something that I want – an honestly, a recent example of this is an entrepreneur friend who had a crazy successful course launch.

My brain immediately wanted to find reasons why or how they were doing it wrong. My brain was immediately trying to poke holes into their success. And yes, this actually happened.

Now, it would be really easy for me to feel bad that I even thought this and label myself as a bad person. The only difference is now, I can recognize that my human brain will almost always do this. And that’s okay.

I now have at least more awareness now to kind of catch this in real time. But let’s be honest, it’s not always happening. But I’m now able to question it with curiosity versus questioning it with judgment. Questions like, “Does thinking and feeling this way serve me?” The answer is always no. And then, asking myself, “How else can I think about this, their success, that can serve me?”

These questions get me curious. And my brain, like yours, loves to answer questions. By questioning these thoughts with curiosity, it’s an opportunity to transform envy into something useful that serves us. And if I may be so bold here, envy can then become inspiration.

Instead of thinking, “How come I don’t have that?” I can choose to think, “They or their success is an example of what’s possible. If they can do it, then I can do it.”

So, there’s a story about this that I absolutely love and is such a great example of this. Did you know that before 1954, everyone believed that running a mile in under four minutes was impossible? Many people even believed it was dangerous to do so.

Well, that changed on May 6th 1954 when Roger Bannister finished a mile in just under four minutes, and after he did that, then people saw it was possible to run a mile under four minutes. Remember, people literally believed this was impossible so no one even tried.

I know this might sound crazy to many of you out there, especially if you are a runner. But this is exactly how limiting beliefs work.

Okay, back to the sub-four-minute mile. Well, since he ran that sub-four-minute mile, guess what, thousands of people have since run four-minute miles, or rather sub-four-minute miles because they were inspired. They believed it was possible.

And this is what I mean by transforming envy into inspiration. Not just for one person, but it can inspire so many people. And the ripple effects can be huge. It just creates so much more possibility for others and the world.

Now, when it comes to money envy, I think there’s this overarching belief that their life must be better or they must be happier because they have more money. Even though maybe logically we know that’s probably not true. After all, there is that saying, “Money doesn’t make you happy.”

But I think we’ve all at least had thoughts that maybe life would be better, it would be more fun or whatever if I had more money. It comes to this fallacy that they have a better life.

Now, in a previous episode where I talked about the arrival fallacy when it comes to retirement – I think the episode was called The Retirement Myth. And money envy is kind of like that.

We think their life must be better, they must be happier because they have more money. But one thing I’ve learned is that life is always 50-50. Having more money does not make you happier, for sure. You’re still going to have problems. You’re still going to have days that don’t feel good. Problems don’t magically go away if you have more money.

Sure, some problems do, but sometimes you have more problems when you have more money. And life is not suddenly easier when you have more money. And we all know this is true because we were all once medical students making no money. We were residents making some money. And then, we became attendings, making a lot more money.

And, well, life didn’t just magically become rainbows and unicorns because our income quadrupled. Because we’re still the same person. Unfortunately, I think a lot of us have seen examples of envy played out where people who became successful, who became wealthy often lose friends.

So, here’s what I suggest the next time you are feeling envy about someone else’s life and their money. Here’s what you can do. Ask yourself, “What am I telling myself that is creating the feeling of envy?” Because remember, feelings come from our thoughts, and we can redirect our thoughts. I think we are all in agreement here that envy is not a good feeling and it’s definitely not useful or productive.

I then like to ask myself questions like, “What is the upside of me thinking this?” Hint, there almost always is no upside. “Does thinking this serve me?” Hint, the answer is no. And then finally, “Does thinking this help me be my best self?” Again, no.

After asking myself these three questions, I then like to thank my brain for sharing this not-very-useful thought and gently redirect it; redirect it back to my life. Remember, their life is 50-50. My life is 50-50. Envy is a wasted emotion.

And what I think many of my clients find ironic, when I point out that someone out there is envious of you, I promise. Someone out there is envious of you and your life.

Remember when we were students and we would look up to an attending or two or many about their life, “Oh, it must be nice they can afford these things. They’re so smart.” Well, you’re that person now.

Now, when I think of someone and I start to feel some envy, I try my hardest to look at their life, their success, their wealth, whatever, as an inspiration. How can their example inspire me into action and to truly embrace that if they can do it, that means I can do it too. And never forget, like I said earlier, that someone out there is envious of your life.

That’s all I’ve got for you today. I’ll see you guys next week.

Hey, if you enjoyed this episode and don’t want to miss out on new episodes, please hit the subscribe button on your favorite podcast app. See you next week.

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All About 401(k) Plans

30: All About 401(k) Plans

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All About 401(k) Plans

I want to take this episode to talk about the nation’s most well-known retirement program: the 401(k). Most of us go into our first job knowing about 401(k)s in the context of having access to that plan through that specific job. But so many people don’t yet understand their options when it comes to moving on to a new job, becoming self-employed, or having a side-hustle.

As well as the most common type, there are 401(k) options if you are self-employed, and even a self-directed 401(k) plan, which I personally use, that can provide benefits not legislated for within the typical 401(k) structure. And if any of this sounds difficult to digest, don’t worry because I’m covering it all in-depth on today’s episode.

Join me on the podcast this week to learn everything you need to know about 401(k)s. Whether you’re entering the workforce and don’t yet have a 401(k), or you just want to know how to make your money work best for you, what I’m sharing today could make a huge difference to your future.

If you’re ready to take control of your money and practice medicine on your terms, you need to check out Money for Women Physicians. Click here to learn more!

What You’ll Learn from this Episode:

  • Who can open a 401(k) plan.
  • How a 401(k) plan works, what the contribution limits are, and what the associated costs are.
  • Why the rules of your 401(k) may differ from the IRS guidelines on 401(k)s.
  • What you can generally invest in inside of a 401(k).
  • How employer contributions to your 401(k) work and where to access the relevant information for your employer.

Listen to the Full Episode:

Featured on the Show:

  • Learn more about Money for Women Physicians where you’ll learn the tools to make practicing medicine OPTIONAL.
  • Follow me on Instagram
  • 14: Demystifying All Things Roth
  • Learn more about self-directed plans
  • Learn more about the eQRP, a self directed 401(k) plan
  • Learn more about SEPP or substantially equal periodic payments, a way to take out money from retirement accounts before age 59.5.
  • Learn more about ERISA Protection


Read the transcript Expand

Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I’m your host, Dr. Bonnie Koo.

Welcome back, everyone. Today, we’re going to talk about 401(k)s. They’re probably the most well-known type of retirement plan, so I wanted to spend a whole episode chatting about them.

Most of us only know about them in the context of the plan we get access to when we get a job. But there are also some other types, like the individual or solo 401(k), if you’re self-employed. And then, there’s a specific type of a 401(k) known as a self-directed 401(k). We’re going to go over all of these today.

So, first, let’s talk about general rules. The 401(k) is a plan that an employer sponsors. Meaning you can’t just go and open one yourself unless you’re employed. You could be the employer as well, and then you can open a solo 401(k).

So, there are IRS rules for the 401(k) and then there are rules of the actual plan that you have. By the way, the reason why it’s called the 401(k) is because it’s literally named after the section in the IRS code. So, for this, it’s something like part 401, subsection K. Yeah, not very creative, right?

So, the plan rules are generally more restrictive than the IRS rules because there’s the rules that the IRS make saying, “This is a 401(k). This is what you can do with it, et cetera.” But then each individual plan can also do what they want, as long as it follows the IRS rules.

Let me give you an example. Right now, the IRS code says that an employee can take out a loan against a 401(k) up to $50,000. Now, just because the IRS says you can do that, doesn’t mean that your plan lets you take out a loan.

A good example of this for 2020 is with the CARES Act. So, in case you’re listening to this not in 2020, the CARES Act was one of the stimulus bills passed by congress where you were allowed to take up to a $100,000 loan from your 401(k). So, this is above and beyond the normal $50,000. And you could wait up to a year to start repayment. Now, just because the CARES Act was passed, does not mean your plan will actually allow you to take $100,000 out.

Now, let’s talk about the cost of having a 401(k). Now, most plans charge a fee. Sometimes, it’s a very nominal flat yearly fee. Sometimes called an administrative fee. And then sometimes, there are transaction fees for every time you make a trade, meaning whenever you buy or sell something.

And then, there’s the cost of whatever you buy. For example, for the most part, most of us who have 401(k) plans are going to invest in index funds or ETFs. And then those have an inherent cost known as the expense ratio. So, if you have a list of the funds available for your 401(k) in terms of what’s available for you to invest in, next to the name of the fund, there’s generally a percentage next to it called the ER, or expense ratio.

And so, that’s just a small fee that you’ll be paying as well. Now that we’re talking about index funds or ETFs, what can you invest inside of a 401(k)? So, for a 401(k), you can actually technically invest in anything. However, like I said, most plans will give you a list of index funds or ETFs. Some of the better plans will actually let you open your 401(k) anywhere else, so you can have more say in what you invest in.

Now, I want to say real quick, I’m talking only about 401(k)s. 403(b)s, while similar, are slightly different. They’re very similar in terms of the amount you can contribute per year and things like that. But they differ in that 403(b)s are for nonprofit companies. So, a lot of hospitals will fall into that, right? And within a 403(b), you can only invest in an index fund or an annuity. So, that’s an important distinction there.

So, before we move onto more specifics, I want to briefly talk about asset protection. Meaning, if the unthinkable happened and you were sued above your malpractice limits or you were sued personally for something else, is your 401(k) protected against creditors, against bankruptcy, et cetera?

So, the good news is that employer-sponsored 401(k)s that are not individual 401(k)s are protected by something called ERISA. You don’t have to quite understand what ERISA means. But just know that an employer-sponsored 401(k), so if you’re someone who’s employed by a private company or a private practice, your plan is protected against creditors.

Now, I mentioned, unless you have a solo 401(k). So, that’s an important distinction. An individual or solo 401(k) is not ERISA protected. So, that’s something to keep in mind. How big is this risk? Is this something you really have to worry about?

Now, this isn’t an episode about asset protection. However, I will say that many physicians and other high-income professionals, we kind of overestimate our risk. Now, obviously, your risk depends on many factors. And I’m not going to cover that today. But just know that if you do have an individual or a solo 401K, it is not technically protected by ERISA, okay.

Okay, let’s get into some more specifics. So, as you know, if you have a 401(k), you know that you have a contribution limit per year. Now, there’s two types of contributions. There’s the employee, which is you, and then there’s your employer contribution, if any. So, many of us work at a place and you know that you can contribute up to – in 2020 at least – $19,500 a year.

Most of us will just kind of average that over a year. So, when you log into your plan, you kind of elect how much you want to contribute per year. And every plan does it differently. Sometimes, you have to pick a dollar amount. And sometimes, you pick a percentage.

Now, the plan should automatically stop contributions once you meet that annual max per year. Again, in 2020, it’s $19,500. And generally, it goes up a little every year to kind of keep pace with inflation.

Now, think of the 401(k) as a bucket. So, the total bucket is $57,000 in 2020, meaning that your employer can contribute $57,000 minus your $19,500 contribution. Now, most employers are not that generous. But there are very generous employers out there.

Now, I had a 403(b) plan as my first job out of residency. And I forget the exact percentage that they contributed, but it was something like $20,000 a year, which is pretty awesome, right? But still, you can see that I still quite get that maximum bucket of $57,000 a year. I think it was more like $54,000 when I was working, but you get the point.

So then, you might ask, well how do you actually fill up that $57,000 and some other provisions? So, let me give you some other examples. So, some plans let you do something called an after-tax non-Roth contribution. Now, I have a previous episode where I talked all about Roths, including Roth IRAs, including the mega backdoor Roth IRA.

Some 401(k) plans will let you do something called an after-tax non-Roth contribution. What does that mean? That means that beyond the $19,500, which is generally pre-tax, but it can be a Roth contribution instead, you can actually contribute above that amount. But it doesn’t count towards your employee maximum of that $19,500 in 2020.

So, why would you want to do this? I recommend going back to the episode on Roths to find out more about the mega backdoor Roth IRA. But basically, if you’re allowed to contribute non-Roth after-tax contributions, then you could potentially fill up that $57,000 bucket.

Now, I don’t recommend going to above that you miss an employer contribution, if there is one, because that wouldn’t make sense because that’s just free money. If you’re able to do these non-Roth after-tax contributions, then you can actually move or convert that amount directly into a Roth IRA. And that is pretty powerful, right? Because generally speaking, the Roth IRA annual contribution limits are on the lower side, around $6000.

One thing I want to add is that if you are 50 or older, you get a little bit of a break. You can do what’s called a catch-up contribution, which is an additional $6500 in 2020. So, what does that mean? That means that you can do your $19,500 contribution but you can also do an additional $6500 on top of that. Not only that, but that bucket of $57,000 also goes up accordingly. So, now it’s $57,000 plus an additional $6500 if you want to fill up that whole bucket.

Now, I want to say something about employer contributions. So, when you get your job and you get all your documents, I want to make sure that you ask human resources for a document called the SPD, which stands for summary plan description. This is basically the bible for your specific employer plan.

Here, you will find all the information about what your plan allows and what the rules are. So, it’s a document that your HR person can definitely give to you. They don’t usually give it out from the get go. You’ll get more like a distilled summary version of what’s allowed.

If you really are curious and want to know all the rules, then you can ask for this document and they should be able to send it to you in a PDF form. And so, one thing that will be listed there and should be in your summary anyway is how do employer contributions work? Meaning, how often will they contribute or match? And also, are you vested automatically?

So, what of vesting? Vesting is sort of the process where, if your employer does give you a contribution or a match, do you get to keep that money right away or do you have to wait a certain amount of time? Now, there’s two types of vesting. There is cliff vesting and there is gradual vesting.

So, I had gradual vesting at my first job. What does that mean? Well, it kind of is what it sounds like, right? So, gradually, over time, I would be vested. I forget the exact specifics, but it was something like after year one, I was 10% vested. After year two, I was 20% vested. You get the point.

And I think I had to be at the job for five years to be fully vested. So, what that means is if you leave a job before your fully vested, whether it’s cliff or gradual, you may not be able to keep all of that employer match or contribution.

Now, this is something that kind of makes sense, right? A lot of employers will institute this to kind of promote loyalty, because they want you to stay at the job. Cliff vesting means that you have to wait until a certain date before you get vested completely, versus gradual.

Now, I want to talk about two things in terms of using your 401(k). Many of you probably know that, if you try to remove money before you are 59.5, you’ll be slapped with a 10% penalty in addition to paying income taxes if you made pre-tax contributions.

So, while this is true, many people don’t know that there’s something else called the SEPP. Which stands for substantially equal periodic payments. I’m not going to go into the details, but I just want you to know that there is a way to take out money before the age of 59.5 without facing that early withdrawal penalty.

Now, this is something that, once you do, however, you have to keep taking the money out. This isn’t a one-time thing, so you can- just take your money out tax-free, or rather penalty-free. But I just want you to understand that, let’s say you do retire early and you want access to your 401(k) but you don’t want to pay that penalty. You want to look into that thing called SEPP or substantially equal periodic payments.

Now, I’ve said a few times that you can make pre-tax or Roth contributions. And so, that’s important to note. Not all plans will offer a Rot contribution. All plans will offer a pre-tax contribution option, also known as a traditional contribution. So, people always ask, should I make a pre-tax contribution or should I make a Roth contribution?

And that question is kind of hard to answer because it depends on so many factors, how you’re planning to make your money or retire, et cetera. So, it really depends on your tax burden at the end of the day.

Most physicians are in a very high-income tax bracket. Couple that with a high cost of living area that has high state taxes and maybe even high local taxes – I’m thinking places like California, New Jersey, New York State – then a pre-tax contribution would make sense because every dollar you pop into your 401(k) is one less dollar of your gross income. And so, that just makes sense.

So, when you leave the job, what do you do with your 401(k)? Generally speaking, there are three options. Again, it depends on the actual plan. So, many people will just leave it at their job. And many plans allow you to do that.

Another option is to roll it over into an IRA, which is an individual retirement account. This is not the same as a Roth IRA. And so, this is an IRA you can open up at Vanguard, Fidelity, Charles Schwab, places like that.

And then, the third option is to roll it over to the next job’s plan. I’m personally in favor of simplifying and consolidating accounts just so you don’t have to keep track of multiple accounts. Also, remember, most plans have some sort of administrative fee. And so, you’re going to reduce your overall fees by having a lesser number of accounts.

So, if you don’t have a job right away or don’t know if you’ll have one, or sometimes the new job, unfortunately, will not let you even open a 401(k) until you’ve been there for a year – that does happen and that’s a common question I get asked, “Can you do anything about that?” No, because it probably is the way the plan works, meaning it’s part of the SPD, or the summary plan description. And they can’t make exceptions just because you ask. It’s just the way the plan is.

So, I want to talk about solo 401(k)s or individual 401(k)s. This is a specific type of a 401(k) plan that you open if you are self-employed. So, some common examples for physicians are those of you who are locums or those of you who are 1099 employees.

Now, even if you are a regular W-2 employee at a hospital, you might have a side gig where you’re doing things like expert witness work or maybe some consulting, et cetera. In which case, you’re getting 1099 income, in which case, you can open up a solo 401(k).

Now, do you have to open one? No. But it’s a great way to reduce your tax burden. Remember, any amount you contribute pre-tax will lower your gross taxable income.

Now, remember what I said. There’s the employee contribution of $19,500, then there’s a total bucket of $57,000 in 2020. Now, if you have multiple 401(k)s, you’re only allowed to do one $19,500 employee contribution across all of your 401(k) plans. However, you still have that employer contribution, which can be the full $57,000, right?

So, if you are an employed physician and you have 1099 income, you probably can’t do that employee contribution of $19,500 in your individual 401(k). But you can do an employer contribution.

And so, the next question might be, how do I know, or how much can I put in as an employer? That’s a great question. I generally just ask my CPA how much I can put in. But the quick and dirty math is about 20% of your net income. Net income meaning gross income, minus any expenses that you’re going to write off on your taxes. It’s around 20%. It’s not quite 20%, but that’s a quick and dirty rule to kind of see if you have enough money or income to put into your solo 401(k).

So, the next question I get is, where can I open an individual 401(k)? There are so many places. But the big custodians like Vanguard, et cetera, they pretty much all offer an individual 401(k) plan. They’re generally limited, though.

Now, these places like Vanguard, Charles Schwab, Fidelity, I’m pretty sure their individual 401(k) plans are free, meaning they don’t have any administrative fees. They just have the fees associated with the funds that you purchase.

But be sure to read the fine print because they are free, they kind of give you a cookie-cutter individual plan, which is probably fine for most of you out there. But if you want more features, meaning you want the ability to take out a loan – remember, it’s $50,000 – or you want some other options, you’re probably not going to get them at these types of plans.

And one thing I do want to say is that at the time of this recording, Vanguard’s plan, I don’t recommend. And that’s only because they don’t allow rollovers, meaning if you have a solo 401K, and let’s say you switch jobs and you want to move your employee A, employer A’s money into your solo 401(k), you can’t do that. Which is kind of unfortunate because that is a big perk of having a solo 401(k), that you can roll over other types of accounts into it.

Now, I opened a solo 401(k) a few years ago and I opened up at TD Ameritrade. What’s great about TD Ameritrade’s plan, at least at the time when I opened it, they had a Roth option. I don’t know if Vanguard offers one, but that’s something that you want to have the option of. That’s something you want to look into.

Now, I’ve actually since moved my solo 401(k) out of TD Ameritrade into a different plan. I specifically created a self-directed 401(k). So, that’s what I want to talk about right now.

So, what is a self-directed 401(k)? So, it kind of is what it sounds like; self-directed. Meaning that you get to direct the investments, which means you have a lot more choices besides the regular stocks or ETFs or index funds or annuities, et cetera. You have a lot more options.

You can invest in real estate, direct and passive, like syndications or debt funds. Now, a self-directed 401K is a great place to invest in a real estate debt fund because the debt fund profit is taxed at your marginal tax rate, which kind of blows when you’re at a high tax bracket, right? But if you do it inside of a self-directed 401(k), or even better, inside of a Roth IRA, then those returns are tax sheltered until you take it out.

And so, where do you open a self-directed 401(k)? Again, there are many, many, many options. I personally opened mine up with a company called eQRP. Now, eQRP is the brand name. It’s not an actual type of a plan in terms of being identified in the IRS code.

However, QRP stands for qualified retirement plan, and so the eQRP is a specific type of qualified retirement plan and it is basically a self-directed 401(k).

Now, I chose the eQRP for a few reasons. I chose the eQRP because I did want the ability to self-direct the funds and invest in syndications, et cetera. I also wanted checkbook control. I wanted to eliminate the middle man.

Now, if you have a 401K or even a Roth IRA, et cetera, you kind of know that it’s not super-easy to get the money out or do transactions. You have to go through a middle man. But with a self-directed 401(k) that has checkbook control, I literally have a checkbook and, if I want to take money out or invest in something, I can literally write a check. Now, for the most part, I don’t really write checks. I just do an ACH transfer because that’s just easier.

Another unique thing about the eQRP is that it has more protection than a regular solo 401(k) because they have an LLC wrapped around the account. So, I’ve had the eQRP for about a year now and, so far, I’ve used it to invest in one syndication fund, and I’ve also been able to take out money through the CARES Act via a distribution to use to invest in direct real estate.

A self-directed 401(k) is a great way to start investing in passive real estate since you regularly can’t do that with a regular employer 401(k) plan. We’ll link to all the things we talked about in this episode in the show notes, including how to learn more about the special eQRP.

Okay, so now you know all about a 401(k) plan and you know the sort of general rules and also the types of options you have, including self-directed 401(k) plans. If you want to learn more about your specific employer plan, then like I said earlier, ask HR for a copy of the SPD, or summery plan description, and then you can skim it to see what’s available for your plan.

I’ve had many of my students in Money for Women Physicians find out that they can do things like a mega backdoor Roth IRA, or that they can make Roth contributions instead of pre-tax. And so, it’s just really important to understand your plan so you can take full advantage of what it has to offer.

Okay, I’ll see you next week, everyone.

Hey, if you’re a woman physician who is ready to practice medicine on your terms, then you’ve got to check out my program Money for Women Physicians. It’s part course and part coaching and 100% guaranteed to put more money in your pocket. Go to wealthymommd.com/money to learn more.

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Negotiation & Money with Dr. Linda Street

29: Negotiation & Money with Dr. Linda Street

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Negotiation & Money with Dr. Linda Street

What do you think when you hear the word negotiation? If you’re anything like me, you’re probably not super-excited about the idea of having to negotiate anything, especially when it comes to a new contract at work. However, this aversion to negotiation leaves so many women physicians voluntarily underpaid and undervalued.

To discuss the topic of negotiation, I have the perfect guest on the show. Dr. Linda Street is not only an amazing physician, but she’s also a coach who specializes in helping women negotiate higher salaries, signing bonuses, and the other intangibles that sweeten the deal, whether you’re starting a new job or discussing the terms of a contract renewal.

Tune in this week to discover how to value yourself in a negotiation so you can get the best possible salary. Dr. Linda Street and I are discussing how people sell themselves short in negotiations, how Linda helps her clients negotiate better pay and even improved work-life balance, and why the skill of negotiating really comes down to your mindset.

If you’re ready to take control of your money and practice medicine on your terms, you need to check out Money for Women Physicians. Click here to learn more!

What You’ll Learn from this Episode:

  • Why mindset matters so much in a negotiation.
  • The range of the salary increases that Linda has helped her clients negotiate.
  • Where Linda sees so many women physicians go wrong when negotiating a new contract.
  • The non-financial aspects of a contract that can make a huge difference to your experience at work.
  • How to discover your market value so you can negotiate the best deal.
  • What you can do to display your value as an individual, rather than just a job title.

Listen to the Full Episode:

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Read the transcript Expand

Welcome to The Wealthy Mom MD Podcast, a podcast for women physicians who want to learn how to live a wealthy life. In this podcast you will learn how to make money work for you, how you can have more of it and learn the tools to empower you to live a life on purpose. Get ready to up-level your money and your life. I’m your host, Dr. Bonnie Koo.

Hello, everyone. Welcome back. Today, I have a special guest on the show. I have Dr. Linda Street. Not only is she an amazing woman physician, but she’s also a coach.

We both trained at the Life Coach School. And her superpower is to help women physicians negotiate; negotiate for higher salaries, higher sign-on bonuses, and also other intangibles that can really sweeten the deal when it comes to your job, whether it’s a new job or whether you’re renegotiating your contract.

So, I’m so happy she’s on the show to talk all about negotiation because it’s definitely something I think a lot of us shy away from. And of course, as you may have guessed, negotiation is really all about mindset. Because how many of us are thinking happy things or super-excited for our next negotiation?

Many of us would rather just go in a closet and close the door and turn the lights off. At least that’s how I feel. And so, mindset and coaching is so important when it comes to getting your mindset straight so that you can negotiate for yourself. So, listen on.

Bonnie: Awesome, so Linda Street, welcome to the show.

Linda: Thank you for having me. I’m excited to be here today.

Bonnie: So, for those of my listeners who don’t know you, Linda, could you introduce yourself a little bit?

Linda: Yes, happy to. So, I am an MFM, or maternal fetal medicine specialist by day. And I stumbled into, almost, negotiation coaching when I was actually negotiating my own contract in my last job. So, at the time, I was in a life coaching program that didn’t have anything to do with negotiation. And when I had all sorts of brain drama about the upcoming negotiation I had and who I was negotiating with, I brought it with me to that course.

And the mindset shifts I achieved from life coaching towards that negotiation really led me to substantial progress. So, I actually was able to negotiate a $65,000 raise in academics…

Bonnie: That’s amazing. Does that even happen in academics?

Linda: It did once. I don’t know if it’s ever happened again or will. But I was able to negotiate that in academics simply because I shifted my mindset. That was the only thing that changed.

Bonnie: That is amazing. I mean, $65,000, because I feel like we’re told – my first job out of residency was in academics and I didn’t even negotiate. I didn’t even realize that’s something I could do. So, I’m so happy you’re on the show. I’m wondering, do you have any data on what percentage of women negotiate at all?

Linda: So, it varies a lot. My experience in talking with women physicians and dealing with our audience, people like us, is that a fair amount of them, when they come to me, did not negotiate last time. And so, I would say probably around half. And really, of the half or so that are negotiating, a lot of them are doing it really sub-optimally.

And what I mean by that is they’ll say, “Okay they’re offering me, say, 225. Let me ask for 230,” because it feels like they’re getting a little something and they feel good about it because the employer’s like, “Oh sure,” because $5000, no big deal for them. And so, they walk off feeling like they negotiated well until two years down the road when they find out their male partner is making 250. Or they find out some piece of information that leads them to feel like, “Oh, maybe that wasn’t quite as much of a give as I thought it was at the time.”

Bonnie: Yeah, I’m curious, what’s the range of money that you’ve been able to get for your clients?

Linda: Right, so I’ve actually had some clients, unfortunately, that the raise wasn’t there at all, typically were able to get something non-financial at least. And we’ll talk about that a little bit too because there are straight dollar raises and straight dollar changes in a contract. And there are also a lot of other things that are non-financial that can make your experience of your job a lot better, but not necessarily change that bank account number.

So, it varies from zero, I would say, on the infrequent end, to the most I’ve gotten somebody was $50,000 on the salary and they also got a substantial sign-on bonus that was about 10% of their annual pay.

Bonnie: Wow, that’s big bucks. I mean, it’s not chump change. I wonder if I could negotiate. Although, I was told that everyone gets hired the same salary. And when I did speak to my colleagues, because as you know, I’ve always asked people what they make, and they all made the same. So, I felt pretty good about that. But I guess I wonder if it was still up for negotiation or not.

Linda: Right, and even if it wasn’t, there may have been something else that would have improved your experience that you could have gotten thrown in there, as I call it, a pot-sweetener. But something to make it a little better that isn’t financial.

Bonnie: Yeah, so let’s talk about some of those examples.

Linda: Right, so the number one is time. As you and I both know, time is the one commodity that we’re all limited to. And you can’t buy time. You can in some ways, but everybody has a finite amount. And so, one way you can negotiate is asking to be a lower FTE, or lower fulltime equivalent.

So, for example, in my most recent job negotiation, they offered a salary that was below where I would have wanted it to be. And my first approach was actually not to ask for a different amount, but to ask for the same amount for four days a week.

Bonnie: Wow, and did they go for that?

Linda: Not quite, but almost. So, they came very close to that number on a four-day week schedule. Because for me, my time was more important than having that little bit of extra money. And so, I think one thing that you can negotiate for that isn’t actual salary is to cut back your FTE. Or, in an academic setting, to have increased administrative time, or unscheduled non-clinical time. And that can certainly be advantageous.

There are other things as well. So, as you and I both know, our parental leave benefits in this country are, oftentimes, not ideal. And so, you can negotiate for a paid maternity leave. I had a previous client very successfully get maternity leave that was paid for 12 weeks placed into her contract. So now, when she goes on maternity leave, she doesn’t have to worry about, “Okay, do I need to apply for short-term disability? Do I need to all these things?” She just knows it’s covered.

Bonnie: That’s pretty amazing. That’s almost unheard of, I would say, right, for physicians?

Linda: Right. But how many people are asking?

Bonnie: That’s true. If you don’t ask, you can’t get it.

Linda: True. And so, those are bigger ones. Certainly, there are other things, like a parking spot. I know certain institutions, there are better and worse parking spots. It can be as small as that. Or an office near your clinic so that if you are working on projects in between patients, you can scoot over there for a half an hour when you have a no-show. There are so many things and the sky is really the limit.

Bonnie: Yeah, I’m also wondering about things like your CME budget, CME time, paid time off, et cetera.

Linda: Right. And those things vary from institution to institution as to which ones they’re pretty hard on, “No we don’t move on this,” to which ones they are happy to move on. But you can’t really figure out what your employer I willing to live on until you start asking.

Bonnie: Very true. So, let’s move onto how to find out what you should be paid in terms of, obviously, specialty, academics versus private. I know everyone talks about MGMA. What are your thoughts on that?

Linda: Right, so really what you’re asking about is how to find out your market value. What is somebody willing to pay? Ultimately, your value is whatever somebody is willing to pay for what you provide. And you can certainly do some things to move that equation.

And what I mean by that is, when you’re doing your negotiation, you can really point out your value in a way that makes it so they don’t just want another dermatologist, they don’t just want another OBGYN. They want you because of the specific things you can offer. And when you can shift their perspective to the fact that they need you instead of someone of your specialty, you can often move that value mark because now, all of a sudden, they don’t want to lose you and may be willing to pay a little higher market rate.

But in general, for a jumping off point, MGMA is a nice starting point to get an idea of what different people in your area of the country make doing your same field. But it’s a wide range. Even within a specialty, there’s a wide range between the 10th percentile and the 90th percentile; oftentimes six figures.

I think very few specialties actually have less than a six-figure difference between the 10th percentile and the 90th. It’s typically several six-figures. So, that’s a lot of variability and your job, as the person negotiating, is to try to be as high as you can on that scale. Most employers aren’t going to go over the 90th percentile because of Stark laws.

So, there are governmental laws to really prevent kickbacks and things like that. And so, most places, as an employer, are not going to go above the 90th percentile. But certainly, there’s a wide range below that 90th percentile where you could fall.

Bonnie: Definitely true. I mean, even in dermatology there is such a huge range of what a general derm will make and I’ve experienced that range myself, between academics and private. One thing I really liked, that you said about showing them your value as an individual versus, “I’m just another doctor,” and so that reminded me of one thing I learned, probably from Brooke Castillo, that you really want to understand what your employer values.

So, obviously they need a dermatologist. But then, what else would they value in you. And that’s something I think that’s worth finding out. I guess the question is – and I don’t know if you have any suggestions, Linda, is how do you find out what they value besides being a good doctor, blah, blah, blah?

Linda: Right, so if it’s a renegotiation, you should have a good feel for this because you’ve lived in that environment. So, if they’re building a new hospital on the outskirts of town, they may be looking for somebody willing to go out there. Outreach is a sexy topic in medicine these days. So, a lot of times, if you’re willing to staff an outreach clinic, that may be advantageous to them.

Building programs, like if they’re putting a lot of money towards a new women and children’s tower or a cancer center or even a tinier program within a larger area, if you fit into that and you have some skillsets that help to build that program, show them that.

So, for example, if they’re building a new program for – and what I do, fetal diagnostics is a big thing, fetal procedures and fetal surgeries. So, if they’re building a fetal surgery program and you’re somebody with some of those skillsets, point that out. Point out how you could help build the program.

If you’re somebody who has a background in research and you’re going to an academic center, highlight that because that’s something that can move their program forward. So, you want to highlight traits you have that line up with their mission.

Bonnie: That’s such a good point. Because I feel like sometimes we forget that we bring other skills to the table besides our doctor skills et cetera. Because so many physicians these days, at least those who work for larger systems, it seems like there’s a lot of room for leadership roles and other non-clinical roles that can sort of help your salary and also give you less clinical time, if that’s something you want.

Linda: Right, and certainly within that framework, you’ve shifted leverage now because leverage is really an equation and a balance between what you have to lose if this doesn’t work and what they have to lose if they don’t get you and if you can modify what their perceived loss is if they don’t get you or if you don’t sign this contract, then you can add this subconscious pressure to make the contract worth you signing. And that can help them to increase what they’re willing to offer.

Bonnie: So, it sounds like renegotiating is also useful. See, this is something I would not have thought as well. Because my first job, I was there for, I can’t remember, it was about two years or so. So, I wasn’t there super-long. And so, what does that mean, renegotiation? When do you actually do that? Is it just the end of a contract term? Is it once a year? What do you say about that?

Linda: Right, so it varies from place to place, but I would say typically it’s a few months before your contract expires is a great time to start having these conversations and to start thinking about what are the parts of your job that don’t bring you joy? What are the parts of your job that really just grate on you? And how can you fix those things?

Like, what would you like your job to look like? What would you like your salary to look like? And really start thinking about what you want. Because you can’t ask effectively for something until you really know what you want and why. And we see that in everything. If you don’t have a strong why, you’re less likely to wade through the discomfort of doing what you have to do to get there.

And so, the first step is really figuring out what you want changed, what you like, what you don’t like. And then from there, really looking at where you work, what they value, and how you can present what you need in the framework of how it benefits them. And I think that’s one of the more common things people make mistakes with in a negotiation, is ignoring the mindset of the other party. Because it’s not just you in this dance. The negotiation is simply a conversation with the goal of making an agreement. And there are two people in that conversation; you and the person who’s negotiating with you that’s representing your employer.

Bonnie: That’s such a good point. So, tell me a bit how you help women physicians. I don’t know if you work with other professions as well or you focus on physicians?

Linda: I focus primarily on women physicians. Certainly, these skillsets are kind of meta skills that you can extrapolate to really any field. But what I do best is female physicians because those are my people. And really, we just walk through the process. So, we look at, okay, in a very clear stepwise fashion, where’s my brain? What is my mindset? What are the hang-ups I have about the thought of negotiating?

Because that’s step one, getting to the negotiating table. If you can’t get to the table, you’re not going to make any progress. So, the first thing you have to do is really clear up all the thoughts you have about a negotiation and…

Bonnie: You mean drama?

Linda: All the drama, right. Because we hear the word negotiation, and I have yet to ask somebody what they feel when they hear that word and hear something positive. Typically, when I ask a client, “Okay, so we’re working together. When I say the word negotiation, what do you think?” Nobody ever says, “This is going to be so much fun.”

Bonnie: Everyone’s scared and they don’t want to do it, right?

Linda: Exactly, it’s like cleaning out your closet. Nobody wants to do it because it seems like something they’re not good at. And as female physicians, I mean, as a doctor, you’ve gone through all this training and you’ve gotten very good at what you do. So, doing something you’re not good at doesn’t feel good.

Bonnie: Absolutely. Because to me, it seems like a confrontation, which clearly it really isn’t, but that’s my first thought too.

Linda: It triggers all that natural fight or flight response of the tiger is going to eat me, run like heck. And so, the first step is digging through all that. Because if you can’t get to the table, you’re never going to make an agreement. You’re never going to get anything advantageous for you. You’re going to be resigned. You’re going to be scared about the discomfort and you’re just going to sign whatever they hand you, which is typically in their best interest but not always in yours.

Bonnie: Yeah.

Linda: So, once you’ve gotten through that, the next step is really clearly delineating what you want.

Bonnie: Yeah, just like you said, that just totally makes sense. It almost seems like what you’re saying is so obvious, but it’s not because people don’t do it.

Linda: Right, it’s simple but not easy.

Bonnie: Yeah, it’s like, “Well duh, you need to look at…” just evaluating your job in the context of, like, “Okay, what do I love about it? What do I hate about it? What parts would make my life so much easier?” And just even saying that out loud, I’m realizing that a lot of this might not even have to even do with money, right?

Linda: Right. Typically, the financial wins my clients get are wonderful. But the wins that really just floor people are things like time. Time, I would say, is the number one thing that people negotiate for that getting it just feels like you hit the lottery.

Bonnie: Yeah, I totally can see that. So, where can people find you and learn more about you?

Linda: Right. So, I’m at www.simplystreetmd.com and I’m also in a Facebook group. I have a Facebook group called NegotiatHER and we focus on a lot of female physician contract negotiation questions and queries in there. and really, it’s not that hard. The first step is just doing it.

So, if you’ve been considering negotiating, if you’re not sure if you should, reach out because certainly, you’re either experiencing the discomfort of being undervalued or you’re feeling the discomfort of stepping over this hurdle of learning how to negotiate. And I promise that the discomfort of learning how to negotiate is a lot shorter than the discomfort of being undervalued in your job when you show up every single day.

Bonnie: That’s such a good analogy. And Dr. Street offers a program. Can you say more about the program that you’re offering and how people can work with you?

Linda: Yes, so by the time this podcast goes out, we will have launched our Do It Yourself Negotiation Toolkit. And the reason for this I basically I understand that not everybody is quite ready to work with a coach. So, a lot of people want to learn something first and then kind of move on from there. Plus, we all have busy lives, and on demand is kind of where it’s at.

So, this is a virtual course where basically, in 60 to 90 minutes, you go from not knowing what you should negotiate for to having a laid-out plan to approach your negotiation. So, my goal is, at the end of 60 to 90 minutes, depending on how long it takes you to figure out certain steps, that you’ll have a plan to walk into your next negotiation with to lead you to being able to successfully negotiate whatever it is that would make your job better.

Bonnie: So awesome. Such a great resource. I think so many women physicians will benefit from this program, and obviously from your free Facebook group. Because again, as you know, people just don’t do this They don’t even know what to ask for. No one teaches this during medical school. I think that’s slowly changing, but it is definitely a skillset that’s needed. Not even just for jobs, but just learning how to negotiate in other areas of our lives too.

Linda: Right, because the skillset is transplantable really to any type of difficult conversation. It’s basically just conversational skills where two parties may not have the same interests.

Bonnie: Yeah, well thanks so much for being here.

Linda: Yes, thank you so much for having me.

Hey, if you enjoyed this episode and don’t want to miss out on new episodes, please hit the subscribe button on your favorite podcast app. See you next week.

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