Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially!
So let's introduce our next woman physician rockstar – Vivian.
Tell us about yourself:
I’m a practicing pathologist in Florida. I’m married to another physician and we have one child. In my opinion, the PRACTICE of pathology is an unexposed specialty to medical trainees. While it may not be one of the highest paying specialties, it is also not one of the lowest and we have a very low burn-out rate. Trust me…I’m not starving….. Especially for a female, pathology is a fabulous specialty because of the flexibility. I have no waiting room full of patients. While I have a stack of work on my desk, I can get up and get a coffee, run to my kid’s school for a recital, work really early or late leaving some “flexible” time during the day. I have no call or no weekend duties now, but even when I did it was home call and rarely needed to come in.
I wish more medical schools would expose, particularly require, students to spend time with practicing pathologists on an actual rotation. Go visit your friendly pathologist and see what a great gig we have! I have been in practice for 16 years, all in academic settings.
Did you graduate with student loans? How much & what are the interest rates?
I had 80% of college paid for by the military (out-of-state public school) and 100% of medical school (in-state public school) paid for on scholarship as well. I had a small loan (around $5000 if I recall) that I had from college which I paid in full using my first few paychecks as an intern. Though I didn’t have loans, my military commitment for 13 years “trapped” me (and my husband) in non-competitive pay.
What is non-competitive pay? Well…..ten years ago in 2007 our combined dual full time MD income was at an all-time high of $257,000 AGI (which isn’t shabby I realize, ….but one of us is an interventional cardiologist). If we had student loans and made even close to median income for at least interventional cardiology at the time, I’m pretty sure we could have budgeted it in to pay them off. The non-competitive pay is the trade-off for no loans. We learned to live very frugal off our government salaries and lived off of one salary for over 15 years.
Financial aspects of kids
When did you have them?
We have one child who was born when I just started my PGY-2 year.
Are you planning to fund their college expenses?
529 plans were relatively new at the time, so we opened one in addition to the otherwise used vehicle for college which existed prior to 529s, the UTMA. We didn’t do anything crazy with funding them. I put $250/month into the 529 and $200/month into the UTMA for almost 18 years now. We also were helping to fund my niece and nephew as we opened up a 529 for each of them ($100 month/each) My son has scholarship money as well. I’m a believer in the 529 plan because of the tax shelter on growth it provided all those years. We have a lot of flexibility with the UTMA as well.
What are your child care expenses?
We used the military daycare full time from age 6 weeks to 6 years old. My son was born after the private school cutoff (which was to be 5 years old by 30 June), so he then started full-time kindergarten at age 6. The daycare was convenient (across the street), open over 12 hours a day and reliable (it closed maybe once for a power outage and once for an earthquake which also killed the power). It was also cheap being subsidized by government/taxpayer dollars for military. We were too busy to deal with nanny issues.
Once our son was in school, we used carpooling, neighbors and afterschool activities to assist with transportation. By the time we moved to Florida he was old enough to ride his bike to school and stay home alone. While I realize childcare costs are steep, our expenses never went away and really got worse. Our son is involved in an individual sport at the national and international level and the cost of coaching, travel and other expenses has far exceeded most childcare costs for anyone. It’s been running nearly 30K or more annually to support his activity since age 9….and then private school on top of that (see below).
Are your kids in private or public school? What is the cost including after care if needed.
One of the best private schools in the state was four miles from our house. So we took advantage of the convenience of location, at the expense of the tuition. We have been paying over $20,000 annually for private school other than grade 7 (we homeschooled that year…I figured if you are going to F*** up a year in your kid’s education, it might as well be 7th grade…..). Is the private education worth the cost? No. I have liked the small class size and the families we have met and became friends with. Part of the tuition is really “buying you and your kids’ social life” in my opinion. The families at these schools are self-selected. Both my husband and I always agreed on never “skimping” on anything our kid may need. The largest portion of ALL our expenses was always to support our son. The private school has worked for us. Only one more year to go!
Financial aspects of marriage
Are you married?
We have been married 20 years this year. We eloped in Las Vegas while there for a previously planned weekend. The wedding cost $133. Frugality at its finest. I have read the cost of the wedding is inversely proportional to the odds of the marriage lasting.
Did you get a pre-nuptial or post-nuptial agreement?
No pre-nuptial. We believed in pooling resources to achieve economy of scale and ease of finances. We are both extremely busy. We don’t have time to “sort bills” or move money back and forth. We are also both physicians working full time (well my husband works 50% now). We don’t “need” each other for financial support.
Do you and your husband agree on finances?
Though my husband and I are very different in many aspects, we definitely share the same financial goals and values. Both of us agree we have equal rights to our money as we both work very hard. We don’t ask each other to buy things. We both assume were are equally financially responsible. I don’t ask him permission to buy a $750 dress. He doesn’t ask permission to buy $9000 dollars of some stock he wants.
I do all the finances. If we were in financial difficulties I think we would have more discussions. (Side note I also did our taxes from 1997-2012. After our move I got lazy and just pay a CPA now. He’s not doing anything for me other than saving some time. There is no special tax code for physicians. I can read the IRS forms and use a calculator just like he can. But I also like that I can call him and complain about our taxes. This is one area where it is difficult to discuss with your family and friends. They can’t fathom paying over 300K in taxes annually).
Are you the breadwinner?
My husband has always made roughly twice my income, though I would never want his job and I’m sure he would never want to take care of all the things I do at home to ensure our household runs like a well-oiled machine.
Have you experienced a financial catastrophe?
Definitely lost investments. The most significant one recently was one of our foreign stocks was delisted and apparently we were unaware (long story). The stock became worthless. Our real estate rental investment was a loss when all was said and done. In the end, there is no reward without risk and in the 20 years we were married, the gains have outweighed any hits.
What’s your FI (financial independence) number?
Never really thought about a number, but rather having enough unearned income (without actually divesting anything) to live comfortably. I definitely don’t want to work much longer. I don’t enjoy medicine as much as I used to. The “fun times” of pre-EMR and less red-tape are gone. All the other hassles which take up more of my time than actual patient care are really not enjoyable.
I long for the day where I could just read a bunch of slides and talk to a clinician for 30 minutes why their patient may have giant platelets. Unfortunately the latter is not even reimbursable (though it’s a consult technically!) If it doesn’t generate RVUs our institution doesn’t want us partaking…..sad really that it has come to this. Enough soapbox, but the ability to walk away from a job at ANY time is priceless. I’m not working to pay the bills anymore.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
We are basically DIY. For about 15 years we had an account for $8.99/month there was unlimited trading. We set up the account so that every Monday we dumped about a thousand dollars and bought shares of stock for 3-4 companies. We would just change the companies every now and then. We had to transfer our account when this institution closed and now we can’t set up automatic stock purchasing anymore; so I have to admit we are not as regimented.
Some people ask “How can you all retire so early?” Well this is it….REGIMENTED DIY INVESTING. There is no fee drag with stocks or an advisor and now we have free trading. Because the majority of our wealth is not tied up until we are 59 ½, we can do whatever we want with the money and live off dividend income (in addition to pensions).
From a tax standpoint we are paying taxes on four streams of income (my salary, husband salary, husband pension and dividend income), so we really “need” to retire to reduce our taxable income. I am not a huge fan of advisors (no one really cares about your money except yourself) and definitely not assets under management.
What is your net worth?
We have no debt. We paid for our home in cash this last time around. Our net worth without our home is 5.6 million dollars. Because we own our home outright with all the equity, we are just under 6 million dollars since we actually own it rather than the bank.
Do you have insurance?
We have umbrella insurance. By the time we left the military (which offers its own version of life insurance), we were able to self-insure along with collecting the pension as “back-up income”. I do have a free life insurance policy through work at this point and free short and long term disability, but we don’t carry anything else. Due to our finances now, we have very little (minimums required by the state for car) or no insurance on material things (jewelry and home contents). If my car gets totaled I just go out and get another one, pay cash.
What does FI/retirement mean to you? What does it look like?
It is the ability to not depend on your employer for income. You can do what you want, when you want. You can walk away from a crappy job because you don’t have debt and have other sources of income. You can still work, but it is optional.
Any parting words of wisdom?
1) No one cares about your finances except you and your family. Trust NO ONE. You are better off managing your own finances rather than someone else. It’s not hard. If you have someone help you, you still need to have enough knowledge not to be swindled.
2) If you have two incomes, live off ONE. You will never miss the other income if you are not using it for material things. Use it to pay off debt and invest the remainder. If you have only one income try to calculate what percentage you absolutely need to live off and do the same. Remember if you are on one salary of $125,000 as an example, you still are way ahead of the average American and they can still put food on the table. There is no NEED to buy a Birkin bag……..though I really want one!
3) Regimented long term investing. The more money you can take out of your paycheck and “never see” will get you to your goals.
4) Be patient. It took 20 years to get where we are today. Time and compounding is VERY powerful.
5) Get out of debt ASAP. I chiseled away at our first mortgage (15 year mortgage 400K at 7.25%…yeah we are that old and we refinanced from a 30 year at 8%!….) I put extra towards principal EVERY month. By the time we sold our home we just pocketed the entire sale. Living through the era when interest rates were unbearable really pounds the “get out of debt ASAP” hard. And now that we have no debt it is amazing what cash flow is really like…….ALL interest is money out of your wallet no matter what the interest rate is.
And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
Vivian is one wise female doc! I totally agree with her 5 pieces of advice. Way too many people are debt tolerant.