Interviews

Interviews with real women physicians – Sharon

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 heroine – Sharon .

Tell us about yourself:

Hi! My name is “Sharon”. I am a pediatric subspecialist in a private practice. I like my job, but at times I do feel tired. I feel like I wasn’t as exposed to other specialties in medical school that I might have pursued (like radiology). I am currently married and have one son. I love to draw and cook. I am Hispanic. I live in Central Florida, which in my opinion is very reasonable in terms of cost of living. I am currently an attending 6 years out of fellowship.

Did you graduate with student loans? How much & what are the interest rates?

I graduated with student loans but I was very fortunate to go to a medical school in my native country which was more affordable than in the US. I went to a public university. My loan interest is 2.65%. My loans totaled $72K. I still owe about $16K. I was pretty aggressive initially paying off the higher interest loans and I am planning to pay them off completely this year.

Financial aspects of kids

When did you have them?

I had my son 2 years ago, as an attending.

Are you planning to fund their college expenses?

My son is 2 years old. I have a 529 through the state of Utah. I will help him as much as I can, but my goal right now is to have about $150K for college.

What are your child care expenses?

My son has been in daycare since he was 12 weeks old. It was not an easy decision but I didn’t feel comfortable having a stranger in my home all day with my baby. His daycare is very good, close to my office and has cameras that I can monitor.

Financial aspects of marriage

Are you married?

Yes I am married.

Did you get a pre-nuptial or post-nuptial agreement?

Maybe it’s a cultural thing? Not common in our culture. I guess I would've like to have one.

Do you and your husband agree on finances?

I am the primary breadwinner and I am the one that makes all of the financial decisions and plans for the future. He just agrees with everything I do. I make about 3 times what he makes. He realizes that and we have found that keeping our accounts separate works best for us.

Have you experienced a financial catastrophe?

No, thank god!

General Finances

What’s your FI (financial independence) number?

I don’t have a number, but I do have a game plan. I want to pay off my medical school loans (hopefully this year), followed by aggressively paying off my mortgage (hopefully pay it off in 10-12 years).

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?

I handle the finances. To be perfectly honest, my husband shows no interest in learning about our finances, so I took complete control. I had a financial advisor and fired her after everything I have learned reading on my own.

What is your net worth?

Minus $90,000.

How are you saving for FI/retirement?

I am maxing out my 401K and I am in the process of doing a backdoor Roth. Next step – Index funds.

One thing you wish you knew:

More about investing.

Biggest financial failure/regret:

Not getting disability insurance as a resident.

Do you have insurance?

Yes, we have term life and umbrella insurance.

What does FI/retirement mean to you? What does it look like?

I want to be comfortable and still relatively young (late 50’s early 60’s).

Do you give to charity? If so, where and why?

Yes, to a genetic syndrome foundation about $500 a year.

Any parting words of wisdom?

Read White Coat Investor, follow Bonnie’s blog, follow Bogleheads and ask lots of questions!

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I enjoyed reading Sharon's story and I hope you did too.]]>

Interviews with real women physicians -Hatton1

Tell us about yourself:

I call myself “Hatton1” on the White Coat Investor and Physician On Fire blogs. I am 60 and in the process of getting divorced as I write this. I live in the deep South in a low COL town. I actually grew up in the town I live in and have family here. I am an OB/GYN. I did OB 26 years. I went through one malpractice trial and won the case. I am doing just GYN 3 days per week with essentially no call. I own the practice. I could essentially retire any time but owning a business with employees is keeping me off the Obamacare exchange. Would I pick OB/GYN again? I really do not know. It is possible now to do shift work (hospitalist or laborist) which did not exist when I was doing OB. The lifestyle is brutal and stressful especially if something goes wrong! Per hour worked lots of other fields pay better. When I was younger I liked the excitement of a STAT c-section or a ruptured ectopic but I aged out of that. I suspect that lots of ER docs and trauma surgeons feel the same way.

Did you graduate with student loans? How much & what are the interest rates?

I had $29K in student loans. I know you all hate me. I had an academic scholarship. My parents paid for undergrad and bought me a car. Medical school tuition now is ridiculous. I don’t know if I would've gone with today's prices. I can’t even remember the interest rate or payment because it was that insignificant.

Financial aspects of marriage

Are you married?

I am legally married as I type this. I expect my uncontested divorce to be final in the next week or two. I had no prenuptial agreement. My state is not community property.

If you are divorced – what have you learned financially from this, and what advice would you give to unmarried women planning to marry?

My attorney gave me the advice of not raising your spouses lifestyle to the “doctor” lifestyle. If you encourage them to quit work then if you divorce you may face alimony. In my case my husband is still working full time and I went to part time. I gave my husband my equity in a farm we bought which I really did not want anyway. It cost me $35k and $600 in legal fees. We married later in life and kept our finances separate.

General Finances

What’s your FI (financial independence) number?

My financial independence number is 5 million. I hit this at age 56. In retrospect with what I now know about the FIRE movement I think I could've retired at about 45.

What is your net worth?

I am now 60 with a net worth of ~ 7.5 million post divorce (Includes home equity).

Are you DIY?

I handle my own finances. I used a commissioned stock broker for several years starting out.

How did you get to FI and what does it mean to you?

I always filled my retirement accounts up and then filled up a taxable account. I have most of my retirement money in a SEP-IRA and some in a traditional IRA. I have converted a small amount to a Roth IRA. For what it's worth, most of my money is in a taxable account. FI means you can quit work or go part-time. It means no call or weekends. It means anything you want it to mean because you no longer have to work and put up with crap.

One thing you regret:

Not buying an office building.

Do you have insurance?

I no longer have disability insurance. I cancelled it mid-40s when I knew I had “enough .“ I have umbrella insurance ~2-3 million.

Any parting words of wisdom?

My advice is basically grow into your income slowly. Do not keep up with the Jones. Dr. Jones is 75 and still working! I made a number financial mistakes along the way but came out ok. Basically learn about money or it will fritter away. I also recognize that I was very lucky. I became an OB/GYN when very few females were doing it. The demand was huge and I never had to market myself. Those days are gone and you will have to hustle to do well I think. Good Luck.

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I loved reading “Hatton1's” story and I hope you did too. I think she may be the first woman physician interviewed here that has achieved financial independence!]]>

Interviews with real women physicians – Cecilia

Tell us about yourself:

I have been pretty debt-averse my entire life, thanks to hearing my parents argue about money for my whole childhood (my mom, who trusts God and my dad to provide for us, would buy the things her 5 daughters needed, nothing exorbitant, but groceries for 7 are not cheap, and my dad would get mad about how much things cost…while he spent $70k a year keeping the family almond farm going!). My parents to this day have minimal retirement savings other than the land they own (50 acres in the California Central Valley), which is still mortgaged. They never really taught me to manage money, but it was always pretty apparent to me that spending more than you make is a bad plan in general. In any case, being debt averse and interested in many, many things (I changed my major 3 times in college and graduated with political science, psychology, a minor in neuroscience, and decided to go to medical school right before my senior year), it made a lot of sense to do an MD/PhD program (the ultimate decision-delayer for people who can't decide what they want to do!). I was fortunate enough to have my choice of several programs, and since I had been in California for my entire life, I wanted to see what life was like outside the state. I chose the University of Chicago. It was a long road, but I eventually got through my PhD after realizing halfway through that I really did not want to continue in basic science research! But I also did not want to accrue $100,000 in debt for the rest of medical school, so I stuck with the PhD. I finished medical school in 2007 and started a general surgery residency. This did not last long, as my contract was not renewed after my intern year. I was devastated. But it turned out to be the best thing that ever happened to me both personally and professionally. I was not ready to give up the dream of surgery, so I did a second year at the only other residency program in the area. I became very close to a co-resident, and he eventually introduced me to his identical twin, who became my husband. After I finished that second year, I had no residency position at all, so I was forced to evaluate my options and choose another specialty. It was very difficult to get back into a residency program – I spent two years working at an urgent care clinic in the Philadelphia area, and enjoyed it far more than I had thought I would. I knew I wanted a procedure-based but non-surgical specialty, and I hated spending hours and hours rounding on patients – so I considered both anesthesia and emergency medicine. I applied through the Match initially in anesthesia, and when I did not match that year, expanded to emergency medicine and anesthesia the second year. I thought long and hard about what I really wanted from a specialty, and finally chose anesthesia with plans to pursue critical care fellowship, since I really missed having my own patients. I was lucky enough to have made valuable connections in medical school; they helped me secure an anesthesia spot outside the match, which started 4 years after I had completed medical school and 2 years after I'd left surgery. By the time I finally finished my anesthesia residency, I had been out of medical school for 7 years; my peers who had started medical school at the same time as I had (in 1999) had been attending physicians for as long as 8 years. In choosing a specialty, you must decide procedure-based or clinic-based, primarily outpatient or primarily inpatient, flexibility with regard to family demands (although I did not think about this since I was unattached during most of this time), and whether you want to be primarily a consultant or “the” doctor for that patient. It's also very important to consider what life is like beyond residency – this is very hard to do when you have the limited perspective of a 3rd year medical student, but you really need to ask attendings what their lives are like several years out and how they are balancing everything. I have a feeling many medical students make the mistake of not thinking beyond residency. In my case, I knew I wanted to have some ownership of my patients and relationships with them that last longer than a few hours – anesthesia does not really offer this (unless you go into pain medicine). During my two years of surgery I had spent a great deal of time in the ICU, and I really enjoyed the challenges and rewards of caring for critically ill patients. As it turns out, critical care and anesthesia are also fairly well-reimbursed fields compared to primary care. I did not consider this aspect at all when choosing a specialty (I needed a residency, any residency!), but it was a very fortunate choice since it now enables me to work part time. The only caveat to this is that outside academic centers, it is difficult to find positions that allow one to do both critical care and anesthesia. So, I have two totally separate part time jobs at two different hospitals, and no benefits with either job. And in order to be part time, I work in an anesthesia group with very low reimbursement, such that my ICU time actually pays better (for example, the anesthesiologists at the hospital where I do critical care actually make slightly less than double what I make per hour for anesthesia). Nevertheless, I'm currently 1.5 years out of fellowship, working approximately 30 hours a week (in-house time; my actual “work” time involves a great deal of home call too, so I've just given the in-house time) between both jobs.

Did you graduate with student loans? How much & what are the interest rates?

The ordeal of being forced out of residency training and spending time working would have been a financial catastrophe if I had had any loans other than a small amount from my undergraduate time. I went to a private university, graduated in 1998 with about $30K in loans, which were consolidated many years ago at a 2.8% interest rate. I'm not paying them off quickly because I can earn more than 2.8% investing, and I started saving for retirement very, very late. The time out of residency (prior to completing one) was a dark period in my life because there was no job security as a non- board-eligible physician (insurance companies will not reimburse for your care for the most part), and I had no guarantee that I would ever be able to secure another residency spot.

Financial aspects of kids

When did you have them?

My first was born during my fellowship and went to an excellent and very affordable home daycare about a mile from our house ($270/week). I specifically chose a fellowship program that did not have a significant in-house call requirement. The program also offered weekends off. This was extremely important in terms of work/life balance! My second child was born during the first year I was in practice. I knew after having my first child that I wanted to work part time, and I wanted to be in private practice rather than academics since I just do not do well at large academic centers with their combination of killer politics and enormous egos. Spending time with my children is my first priority (although working is sometimes easier!) They are almost 1 and almost 3, and will go to public school (our priority when purchasing a home was excellent public schools, so as a result we are in a half-million-dollar <1,000 sq foot condominium!). We were able to find an excellent sitter for them, who picks them up in the mornings on the days I work and cares for them in her home, with her own children and one other child. She works with my flexible days, and we pay her a guaranteed minimum every week (two days), with a small bonus for more than 3 days a week and an extra $20/day for pickup. We spend an average of $1800 a month for care at the moment. We were also fortunate that my husband's parents came from India for 6 months to help us when each child was born; neither had to go to daycare until age 8 months. We plan to have a 3rd child if we are able (I'm already 40!). We do not plan to fully fund our children's college educations; we are saving for state school for undergrad at the moment, which is $400/month/kid with any additional money from grandparents going in as well. We started each 529 account with the $3,000 gift from paternal uncle and grandparents. This is because we have been cautioned that you cannot borrow money for your retirement, but you can for education.

Financial aspects of marriage

Are you married?

Yes. I married quite late in life as well – during my 3rd year of anesthesia residency, at age 36. We had many in-depth conversations about our goals and plans for life, including finances, before we got married. I tend to spend a bit more money than my husband, and enjoy eating out quite a lot more, but overall we are very much in agreement. He is a PhD trained software engineer, and came to the US in 2002. He has been saving money for retirement or a rainy day ever since then, even when he was a graduate student.

Did you get a pre-nuptial or post-nuptial agreement?

My husband and I do not have a pre- or post-nuptial agreement; neither of us cares about money very much, and we trust each other completely. We would both just want the best for our children if we were to separate.

Do you and your husband agree on finances?

We have full access to each others' accounts, although I do our financial planning. We never really combined accounts; when I was a resident and there was a large discrepancy in our incomes, we split expenses proportionally based on after-tax income. We have a single joint checking account which we use only to deposit checks with both our names on them; otherwise we pay set expenses from our individual accounts (he pays mortgage, property taxes, shared credit card bill; I pay kids' expenses, various insurances other than his life insurance, and transfer money to him if we have large purchases on the credit card, like plane tickets or new furniture).

Are you the breadwinner?

Now, we both earn six figures – he is full time and I am part time at two jobs, and I expect to make somewhat more than he does this year for the first time. Last year I took 3 months of unpaid time off (a month total of vacation, 2 months of maternity leave), so I did not make as much as I will this year.

Have you experienced a financial catastrophe?

My boss at the urgent care clinic (before anesthesia residency) was one of the least honest people I have ever known; the only bona fide financial catastrophe I have experienced was a baseless lawsuit he brought against me during my second year of anesthesia residency (for breach of a contract he'd tricked me into signing without realizing it). Hiring a lawyer for the suit, which dragged on for 6 months, set me back $35,000 – money which my fiance at the time ended up paying off for me.

General Finances

I started my journey of learning about money management in my dark period between residencies, when a friend referred me to the book “I Will Teach You to be Rich”, by Ramit Sethi – I'd never realized personal finance could be so funny! Although it is not specific to physicians, the principles of the book are very accurate and based in how people really live, not how they think they should live or how they think they are living. From there, I worked with a financial adviser who collects residents via free dinners and offers them free advice during training, then wants 1.2% of AUM plus $2,400 to do a “life” plan once done with residency. I broke up with him after I realized the 529 he'd steered us toward for my firstborn cost ~6+% and a state plan I set up myself would cost about 0.3%. But I do credit him with helping me get life and long-term disability insurance, as well as pointing out the need for umbrella (and therefore high-limit home and auto) insurance. I've not yet needed to use my long-term disability coverage, and it is quite expensive ($4800/year for a $7,200 monthly benefit). I just don't want to take the risk of getting rid of it. It is cheaper, incidentally, if you pay for it annually rather than monthly (mine is about $20/month less).

What’s your FI (financial independence) number?

I am still trying to figure out what our financial independence number is; probably somewhere close to $4 million, assuming we spend about 25-30 years in retirement and need about $150K/year. It is very difficult to know exactly what this number should be, since it depends on how old we are when we retire (husband wants to be done around 60, I am thinking perhaps 65, and we expect to live to be at least 90 since I have two grandparents still living in their early 90s), as well as what happens to Medicare in the next decades. If we are unable to gain insurance through Medicare, the numbers will be VERY different. It also depends on where we want to live and when/whether we end up buying a bigger house (anything in a good school district is about 1.5 million right now, and if we wait to buy, it will only go up).

What is your net worth?

I'm not sure exactly what our net work is but it is somewhere close to $1 million given my husband's 15 years of dedicated saving. The current plan is to save like crazy for another 7-8 years to try to hit $2 million, then reduce our contributions to more like 50K/year and buy a larger house, with extra payments to the mortgage if we can afford them. The flaw in all of this is that we will have to sell our current condo to afford a down payment, but we would prefer to keep it to make money. I will also very likely have to take a full time job since there will be simply no way to afford payments on a 1.5 million dollar mortgage (with $2,000+/month of property taxes) without a combined income of at least $500K – housing expenses will be $12,000 per month once extra expenses, insurance, and taxes are factored in. This compares to $2,900 a month on our tiny condo. Running those numbers makes me think perhaps we will just stay here forever and find a way to squeeze our hoped-for three children into our 2 bedrooms!

How are you saving for FI/retirement?

Our savings goal at present is $100K/year (we were at about 90K last year, which was about 35% of post-tax income). This is a combination of a solo 401K for me (lower fees and up to 25% of net profits as the employer contribution, a better deal than the 401K offered by my W2 anesthesia position), my husband's 401K (with a paltry $3,000 employer contribution), backdoor IRAs for both of us, and his discounted employee stock purchase program (17,500/year). The remaining amount goes in taxable accounts (Vanguard brokerage account). I have a few individual stocks, but the vast majority of my portfolio is Vanguard index funds (I like the Target Retirement Date funds since they automatically rebalance as the target year approaches). I have a little money invested with Lending Club and Ariel Investments; the fees for the latter are quite high (about 1%), but their average returns are about 10%, so I figure it is worth a try for a few years.

One thing you wish you knew/regret:

One thing I wish I had realized about marriage is that there is a tax penalty for it unless only one spouse works, since the total household income determines the tax bracket! We both have zero exemptions and extra withholding on our W2s, and I pay very large amounts of estimated taxes on my 1099 income because I do NOT want to be unpleasantly surprised by a large tax bill at the end of the year. Since I have been doing this we have gotten large refunds. My greatest financial regret is that I did not save any money during my MD/PhD years – I was earning a stipend for living expenses, and making extra money by doing TA-ships and working as a waitress…but I spent it all. I saved nothing until I started residency, and even then it was only about 5% of my paltry salary. I didn't even save much during the two years I worked in urgent care and earned $125,000 a year! On the other hand, doing MD/PhD has saved me from the crushing debt burden of most physicians, and I never had any credit card debt either. But the magic of compound interest is something I truly wish I had harnessed in my 20s instead of my late 30s.

Any parting words of wisdom?

I feel thankful every day that I have finally achieved the dreams I had as a young woman – working part time, in both my chosen specialties, a mother, a wife, and in the area I'd always dreamed of – close to home but not too close. I hope that by participating in this series I have offered some insights that may be able to help others do the same.

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I hope you enjoyed reading Cecilia's story!]]>

Interviews with real women physicians – Rebecca

Tell us about yourself:

I’m an Internal Medicine physician turned Stay-At-Home/Homeschooling Mom. I met my husband the first day of intern orientation, and we are celebrating ten years of marriage (and four children) this year. Since we met while we were both in the military, we move where the military sends us, which included eight years in one of the most expensive cities in the country and now the past three years in a Southern coastal city with a moderate cost-of-living. I graduated from residency eight years ago, but I only practiced clinical medicine for five years after residency. I trained in the military and served my three-year military commitment practicing general Internal Medicine, during which period my first two children were born. At that point, I got out of the military and took a part-time civilian job for two years, until the military moved my husband (and the rest of us) cross-country when my third child was five weeks old. I planned to take an extended maternity leave to get settled and enjoy this time with my kids, but I enjoyed it so much that I never wanted to go back. We then added one last child to the mix and started homeschooling. This was not my original plan when I started my medical training, but being debt free has given us the freedom to make this choice. When I’m not making lunch, reading Charlotte’s Web, making salt dough maps, and exploring fractions, I read, knit, visit historical sites, and volunteer for far too many community organizations.

Did you graduate with student loans? How much & what are the interest rates?

I had about $50k worth of loans from my first year of medical school (before I joined the military) that were consolidated at around 2%. My husband had no loans. I paid them off as quickly as I could, and finished paying them sometime before I graduated from residency. That may have been a financial mistake, given the low interest rate, but I wanted to be free of them.

Financial aspects of kids

When did you have them?

We have four kids, ages 4 mos to 7 years. My first child was born about seven months into my first attending job, and the second child less than two years after that. I was active duty military and only entitled to six weeks of maternity leave, but it was fully paid at my usual salary. I had my third child at the end of my part-time work, with no benefits, and my fourth child while I was already a SAHM.

Are you planning to fund their college expenses?

We feel strongly that we want to pay for four years of undergrad education for our four children because our respective parents did that for us. The finances on 16 years of college are daunting. We have 529 funds for each kid in each of the two states where we have a state income tax obligation and get a tax break. My husband transferred his post-9/11 GI Bill, which would cover the full cost of state school for one kid or about half the cost of private school for one kid, although that benefit is subject to political maneuvering and we are not counting on it. Knowing that we hoped for multiple children, we started funding the 529 account for my oldest as much as we could when he was born, and have been able to slightly increase the total amount saved with each kid, but our current contributions are only about double what we started, not quadruple. We currently save a little more than 10% of our take-home income for college and that puts us on track to be able to fully pay for all four kids for state schools. All the money in the 529s belongs to me, not to the child, and we treat it as a single pot of money to move among children as needed. We will reassess as they get closer to college and see if we will be able to pay for private schools as well, maybe via our taxable account, cash flowing from income, if grandparents offer any money – we’ll see, but even if we can just offer a state school, that would be fine.

What are your child care expenses?

Childcare for the first two was initially on the order of $1800/mo for center-based infant care, until we were able to get them off the waitlist into the subsidized center on base. That was about $1000/mo for two kids, so a significant savings. Childcare once we had kids #3 and #4 is either really cheap (free!) or really expensive (the entire amount of my potential wages). We decided on center-based care because we were more comfortable with a group of caregivers instead of a single caregiver, cost, and the availability of on-base care with hours that worked well for our usual schedules.

Financial aspects of marriage

How and why I became a SAHM – I had no flexibility with the length of my maternity leave or my work hours while I was active duty. When we learned that we would be moving cross-country with a 4.5yo, a 2.5yo, and a newborn, I decided to take advantage of the last year before my oldest would start kindergarten and keep everyone home with me and enjoy exploring our new city. It was significantly more satisfying (and more fun) than seeing patients and filling out pre-auths for generic drugs. While I liked practicing medicine before I had kids, I loved staying home with them. Part time work was not the best of both worlds for me; it just made me feel like a bad doctor and a bad mother. Once I paid for taxes and childcare and funded my retirement account, I was only bringing home about $500/month, which we haven’t particularly missed. I’ve managed to replace some of the solo 401(k) contributions by picking up some consulting work. Financially, staying home was a wash when we had three kids; now that we have four, I’m saving money by not working. Since I was already staying home, we decided to homeschool kindergarten to maintain flexibility in our family schedule when my husband was deployed. Homeschooling proved to be a wonderful fit for our whole family, meeting the academic and social needs for our children better than we feel any of our local schools would. At this point, with lots of soul searching, I decided that – barring a major change – I don’t want to return to clinical practice while my kids are young, so for a good decade or so. I maintain my licensure and board certification, but if I return to clinical practice, I plan to do a formal re-entry program. If we don’t need the money, I might become a park ranger instead.

Are you married?

Being married and having finances is the key to our financial lives, especially as a one-income family. This is the only marriage for each of us, and the only children we have are ours together. We met at intern orientation, and married just over a year later. We were both military physicians of the same rank, without significant assets and with only a relatively small amount of debt from medical school and a car loan.

Did you get a pre-nuptial or post-nuptial agreement?

We lived in a community property state and did not get a pre-nup or a post-nup, for both religious and practical reasons.

Do you and your husband agree on finances?

We combined all our (non-retirement accounts) since we married and consider all of our money “ours.” Originally we shared responsibility for paying bills and managing money, but I took over all the financial management during my husband’s first deployment, and I have continued to manage all the finances since then. In general, we have similar (but not identical) attitudes towards spending and saving. We used to budget by the method of “pay ourselves first” and then save whatever was left-over at the end of the month, but started formal budgeting prior to my getting out of the military. We use YNAB (You Need a Budget), and now that we account for every penny, we allocate each spouse a personal/hobby budget that rolls over from month-to-month. I do about 80-90% of the spending since I do all the spending for the household and 5/6 of the people in it. My husband likes to complain about his “allowance,” but admits that he is in agreement with the plan and just likes giving me a hard time about it. My husband does not participate in the day-to-day budget reconciling or financial management, but we sit down for budget meetings every 1-2 months.

General Finances

What’s your FI (financial independence) number?

We haven’t fully determined our number. There are several big unknowns that won’t be determined for the next 4-10 years, such as where we’re going to live when we get to pick instead of the military, and whether or not my husband stays in long enough to qualify for a pension. Our expenses will likely not decrease significantly with retirement, and may even increase. We currently have no health care expenses, we are not yet building equity in our forever home, and a good portion of my husband’s compensation is a tax-free housing allowance. Our annual expenses, after taxes and retirement contributions (but continuing college savings) are right around 100k, so at 25x expenses, our number would be 2.5mil, which does not sound like enough money to me at all. At 40x expenses, the number is 4mil, which sounds more reasonable. I will not consider us FI if we aren’t able to pay for college for the kids, and probably wouldn’t feel FI, regardless of account balances, until all the kids are through college and financially independent themselves. The kids should all be through college a few years before we hit age 60, but we are on track to have the money a good 5-10 years before that. We’ll have to see.

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?

We have always done it ourselves. We both started with a solid grounding in the basics of saving and investing from our parents, but I’m more interested in the topic than my husband. Generally, I keep an eye on things and do the research and then we discuss before making any commitments. Because we started young when things were simple, as we’ve added complexity with more marriage, more investments, children, 1099/Schedule C, homeownership, etc., I’ve only had to learn one or two more things per year to manage the finances and do our taxes.

What is your net worth?

Our net worth, including an estimated $50k of home equity is about $950,000. If I could include the 529 accounts, it’d be a nicer, rounder number with an extra zero.

How are you saving for FI/retirement?

My dad gave kitchen-table lessons about the merits of passive low-cost indexing from the time I was about 10 or 12, and we have continued that trajectory. We essentially have a Bogleheads 3-fund portfolio replicated across 2 TSP accounts (government 401k), 2 Roth IRAs, 2 SEP-IRAs, and 1 solo 401(k). We max out my husband’s TSP at 18k/yr, both Roth IRAs (we are comfortably under the limit for being able to make direct, instead of backdoor, Roth IRA contributions), and have SEP-IRAs from prior 1099 work. I contribute all my consulting money, minus required FICA taxes, as my employee contribution to my solo 401(k), and may max it out this year although I haven’t made enough to do in prior years. We have a decent taxable account, but have only been able to contribute to this irregularly as our family and expenses have grown. All told, depending on how much 1099 income we have in a year, we are saving 38-45k/yr in retirement accounts, which is 25-30% of our pre-tax income and puts us on track to retire between 50 and 60, depending on what we decide our FI number is. Our asset allocation is 60% domestic stock, 30% international stock, 10% bonds, and 0.5% REITs. The REITs are new in my new solo 401(k), and I’m still contemplating whether I think the added diversification is worth the loss of simplicity, which is why I’m not including it in any rebalancing, just adding my solo 401(k) money there. I rebalance annually in March, and generally rebalance by changing the allocations for incoming new money rather than selling and buying, unless there’s a variance of more than 5% from my target asset allocation.

One thing you wish you knew/regret:

We are not interested in real estate investing and have no interest in being absentee landlords, but bought a house when we moved to this duty station. Knowing what I know now . . . houses are expensive. And while it hasn’t been catastrophic, it’s mentally stressful to worry about moving given that we will be on the military’s time frame and not our own. We may end up “diversifying” into real estate whether we like it or not.

Do you have insurance?

We have life insurance on both my husband and myself, although less than many doctors. Our only debt is a mortgage that would be more than covered by the sale of the house. We figure we are self-insured for the first $1 million, and have 30-year policies for another $1 million on my husband and $750k on myself. We made these calculations based on three kids so should probably revisit them now that there is a fourth. Our calculations assume that I would return to work after 1-2 years if we did not have my husband’s income. We do not have disability insurance as my husband is still active duty and it wasn’t on my radar before I stopped working all together. We will have to reexamine that when he’s getting out of the military, but it would be less of a concern if he has a pension. We carry the rest of the usual insurances – auto, home, umbrella.

What does FI/retirement mean to you? What does it look like?

We are not FI, but we are on track. I call my stay-at-home/homeschooling life a “sabbatical” from medicine, but financially I think of it as taking some of my retirement years now, while I am young and while my children are young and at home. Our days are full – but joyful – and I feel very lucky to have this time to raise my children, explore our area, support my husband’s difficult schedule, bake muffins, and read good books. I left clinical practice at age 33, and I anticipate returning to paid employment in some capacity in my mid-to-late 40s and work 10-15 years. Whether or not I’ll return to medicine depends on a number of financial and non-financial factors, but I’m really considering the park ranger idea.

Do you give to charity? If so, where and why?

We give regularly to charities including our church, our almae matres, and various charities that meet basic human needs like food, shelter, and clean drinking water. This is a line item in our budget, about half of which goes to regular contributions to our church and the local food pantry, and the other half we donate in larger sums as we see fit. In December, we take whatever is left and divide it up for the children to decide which charities they would like to support and we help them find and research charities working in areas that interest them. We also observe a Lenten fast where we eat more simple meals and give up treats (like ice cream and Amazon Prime), and donate the extra money that frees up in our budget.

Any parting words of wisdom?

Although we are a dual-doctor couple, our finances more closely resemble those of non-doctor professionals than those of most doctors. We didn’t have significant loans, we started earning a decent salary at age 26 right out of medical school, and has increased more-or-less linearly to a low six-figure salary. We paid off our debt and started saving and investing within a few years. We did not max out all out of retirement accounts every year (hindsight!), but we were at that point by about age 30. Like many non-doctor professionals, we have benefitted significantly from income smoothing, earning the same amount of money across a longer time period. There was one year we were (barely) in the 28% tax bracket, but every other year of our married lives we’ve been in the 25% tax bracket. Our annual income is a fraction of many of our peers, but this does two things: 1) it prevents lifestyle inflation so it keeps our FI number lower (as a multiple of lower expenses) and 2) we got an 8-10-year head start. We live (and enjoy) a decidedly middle-class lifestyle rather than a “doctor” lifestyle – We have a nice house with a nice yard, but it’s 30 years old. I drive a new Honda Odyssey, my husband drives the 11yo Volvo sedan that I bought when I graduated from medical school and only has air-conditioning sometimes. We get our movies from the library and occasionally Redbox. I’m still wearing several pairs of shoes I bought over ten years ago. I sew patches over the torn knees of my boys’ pants and hand them down to the next kid. I even wash and reuse Ziploc bags. We are frugal and aim to keep expenses down so that we can spend our money on things that matter to us – date night, all the books we want, swim and piano lessons, at least one nice family vacation a year, a few long weekends, and several other trips to visit family. The power of compounding: Here’s my Vanguard balances graph (numbers removed) over the past 10 years. This is our taxable account, but our Roth IRAs show a similar graph. We married in 2007, finished paying off our loans, and started investing in 2008. The green is contributions, the blue is investment returns. We have now hit the tipping point where our compounding is really compounding on itself – you can see that we’ve continued to make contributions at a much slower rate than before (4 kids!), but that the investment returns keep going up.

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I loved reading Rebecca's story and I hope you did too. Definitely a different life than most women physicians.]]>

Interviews with real women physicians – Diana

Tell us about yourself:

My name is Diana and I am 47 years old. I am completely debt free as I type this and it feels fantastic to say that! I have been out of residency for 12 years. I trained in internal medicine and while I was considering continuing in critical care and pulmonary medicine, I realized that I did not want to be ‘on’ all the time and bailed out on an offered fellowship spot. As many of my colleagues did at the time, we took the easiest path which was becoming a hospitalist. The money was good and the jobs were all over the place. Initially, I chose to stay on board the same residency program and was an academic hospitalist for two years. While I really feel passionate about academic medicine, I am not passionate about the bureaucracy and the nonsense of being short staffed and having to work extra without being paid properly. My husband who was getting paid ‘soft money’ in academics (i.e., grant money that could run out any year) decided that he wanted to pursue medicine. We had a baby and I was quite unsure, but he got into a school he wanted and we moved to California. I worked 10 years as a full time hospitalist, and although I admit the money was better than good, my schedule was terrible. Working nights and weekends and swing shifts was tolerable when my kids were babies but once they were old enough to do stuff, I didn’t want to do this anymore. I got interested in Palliative Care Medicine (which was not a subspecialty when I was in training) and took the proper steps and became board certified. I could make a case to my group to get me out of hospital medicine and transition to PCM. Initially I did 50/50, but like you all know that was like 75/75 and I had to make a request to switch entirely. So for the last 2 years it was PCM only. I enjoy what I do, and it was a good career decision. I was also very caught up in administration, I was always the type to show up to meetings, so I ended up being chair of medicine, chief of staff and director of palliative care. I was compensated for all these roles, but the work was getting too much and I was ready to switch roles.

When my husband finished training, as a radiation oncologist, he could not find a job at the state we were living in. California being such a desired destination, it turned out what he could find was not acceptable in my opinion (no guarantee to make partner for 3 years, etc). The first year out he worked as locum tenens and being a week out at a time with two little kids got old fast. He heard of a position in Hawaii after looking into to it deeper and we moved there! Now I only work 2.5 days a week as an inpatient PCM and feel like I have good work/life balance. My hours are very nice and I found a family up the street that we share car pool duties with our kids. I love palliative care medicine. I recommend people who are not gunning for top specialty to consider it, do a month and see what you think. It may not be for everyone, and in some way, it’s best to choose it after you have done other primary care type medicine, so you have a more robust experience dealing with complex patients. The pay is not what gets you to do this, but I think that the workload can balance the average pay somehow. And if you find meaning in this type of work, like I do, it’s rewarding for the work that you actually do.

Did you graduate with student loans? How much & what are the interest rates?

I did not have any loans in undergrad and my parents had paid for those. I got my masters and by the time I went to med school I was older than most. I got into medical school as a full ride scholarship as it was a dual degree with PhD. So my first year tuition was paid. It was very clear that I did not want to do bench research that year, so I asked to be pulled out of the PhD program. The following three years I accrued about 140 thousand dollars, but I will say that I could have saved more had I chosen to have roommates, etc. I lived alone in my own apartment and that peace of mind of not dealing with someone else’s drama was worth the money I could have saved.But, I still had my loan repayment on a 30 year plan. I think I had it consolidated to 3.15 percent and stopped thinking about it altogether. It is true that it was the Mom Finance Physician Group on FB that kicked my ass into paying it in chunks at the end. When my husband went to med school, his loans were not bad because ‘his wife’ had moved to CA for job so he had in-state status. While he accrued about 160,000 in loans as well, we paid 60,000 with bonuses here and there and did something interesting with the 100,000. We had saved for a down payment for a house as we were renting in med school not knowing where he may end up. We bought a home for $600,000 with 20% down and had a 15 year loan hoping to pay it all fast. As we had quite a bit of equity, our FP at the time told us to get a HELOC on our home for 100,000 and pay off his loans. It sounded crazy, but, his loans were 6.8 percent and we got no kick back on the interest of the loans. Our HELOC was 2.75 percent and helped with end of year taxes…

Financial aspects of kids

When did you have them?

I am a mother of two girls, one I had as an academic hospitalist, the second one I had in the second year of my job as a full time hospitalist.

Are you planning to fund their college expenses?

We have saved over $50,000 for each in scholarshare which is a CA 529. At this point our rent from the property we own (paid off), gets divided into two payments that go into those accounts indefinitely. When they are done with the school, I’ll continue contributing, but will put my grandkids as the beneficiary and myself as the primary account holder.

What are your child care expenses?

As far as the kids go, when I look at my social security income history website, I am wondering where all our money went in the early years of my attending salary. I am sad to say, most of it went to childcare. Excellent child care can be expensive if you live somewhere when you don’t know anyone to watch your kids for free. I had my older one in a preschool that was $1200 a month and even though I worked a week on and off, I still had to pay the full amount. Then when my little one was born, I had a nanny that would watch her at home for the weeks that I worked the first two years. That was another $1500 a month. That is a lot of post tax income that could have gone into savings, investing or paying off debts. But, when you have little ones, excellent care trumps saving money so I am glad I had the insight to not panic.

Are your kids in private or public school? What is the cost including after care if needed.

For the kids, we have chosen private school, because of the philosophy of what is being taught to them more than the experience of a private school. They go to a Waldorf school, and while it is pricy, I’ll take it over the senseless testing of the public and academically rigorous schools out there. For high school, we will switch gears and go to mainstream school depending on what they end up liking.

Financial aspects of marriage

Did you get a pre-nuptial or post-nuptial agreement?

I do not have a prenuptial agreement. This is my second marriage and my first one was to another physician, too. We kept everything separate, bank accounts, rent money, etc. That spoke more to the quality of marriage we had than our financial differences. When we separated, I took the things I wanted and he kept the things he wanted. Very amicable marriage and a very amicable divorce. There was no exchange of any type of money. We are good friends to this date.

Do you and your husband agree on finances?

I should say that my husband and I don’t have any fights regarding finances, because he doesn’t know nor care about what is going on. I make all the decisions, and he is happy with the outcome so far. At one point, I was panicking that he had no idea of what we had and if I died he’d be screwed, so I thought having a financial advisor going through our finances and getting him involved was the way to go.

Are you the breadwinner?

With my current marriage, for the longest time, I was the breadwinner. There was a calculation that I used in the beginning so that we felt that we both contributed fairly. It was something like, you add the total expenses of your home, say $5,000 and you add the total income of the family. And then what that ratio would be for one income vs the other. So for example in that case if I made 4 times more than my hubby, I paid $4000 and he paid $1000. And so on, that way we could also have our own money for what we wanted to spend it on. That was more than 13 years ago. We don’t do this anymore. All in one bucket. We save aggressively, and if anyone wants to buy something, like let’s say a paddle board, it gets paid with no question asked. We work hard and we spend on things that give us good life experiences… neither one of us is abusive with money and we both encourage each other to spend freely. Two years ago on an auction night he encouraged me to bid on a round trip to NYC to see Adele for $5000 dollars! I did it with my sister and it felt like absolute magic, but as a rule, we are Target and Costco shoppers if you need a visual.

General Finances

What’s your FI (financial independence) number?

I don’t know what our ‘number’ is. Online, I had calculated something like $4.5 million and our one time financial advisor said $10 million! He was calculating that we needed 80% of our income. Well, dude, we are saving almost 50 percent of our income now, so that can’t be right! But we don’t have a number, we keep living the way we do and saving the way we do. It’s not like a cake in the oven, we hit the number and stop working. We both feel like you want a life that you can live comfortably so you are not looking forward to stopping the life you are living. Living in Hawaii is expensive but the quality of life is fantastic. Different beaches every weekend, people are very relaxed and we appreciate evening walks and morning hikes and the weather is predictable all year.

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?

It became clear to him that I knew as much in many cases not if more than our FA, and if I couldn’t get him interested neither could he, and we decided after having a relationship with the FB physician mom group to cut the ties with our financial advisor. He did help us with some things so I can’t say it was a total loss as some docs mention and because I had knowledge I didn’t ‘buy’ anything and they were only managing a very small portion of our portfolio. Having a financial advisor is good only if you know what they know and you ask questions to clarify. The FB mom group did that for me for free.

What is your net worth?

$1.6 million

How are you saving for FI/retirement?

I have been known to spend money lavishly, but that only pertains to going on vacations, eating at nice restaurants and treating my family and friends to generous gifts (I took my sister to Paris for a week as a surprise present as an intern: all expenses covered by me). But I never spend the money I don’t have. That money was saved and planned for. I also helped pull out one of my friends out of a bad financial situation by giving $10,000 dollars and never asked for the money back (update, 15 years later, that person is in a 100 times worse shape, a lesson in why you don’t give money to people with money problems…). That was a one time thing, but I am using it as an example of my extravagant spending habits. But as a rule, I am not the type of person to spend money on ridiculous stuff. I am not image conscious and I don’t care that I drive a (be it brand-new) minivan and not a high end flashy SUV. As far as saving for retirement this all was a new thing to me after I split with my first partner. I was a second year in residency and had to pay taxes for the first time on my own and I owed like $2000. Then someone told me to put away money in traditional IRA for $3000 and then I didn’t have to pay taxes since it lowered my earned income. This was all new to me. I didn’t know what retirement was and the word 401K was what older people were doing. I got a book called “smart women finish rich” and the rest is history. I read that book over a weekend in Barnes and Nobles and that book changed my life in terms of understanding compound interest, dollar cost averaging and retirement savings. I started optimizing every dollar that I could save for the pre-retirement and I became a mega savor in 2004. Even though I continued my lavish travels, now I had the notion of what paying yourself first and saving meant. Meanwhile, we have always maximized our retirement accounts. 401k and 457b (hubby) backdoor Roth IRA has been a priority. When he was doing locums we were able to put additional money $15k each year in addition due to his income. My old job had some pension which will be about $250,000 when I turn 65, which is not bad. Currently, we have about $1.3 million in retirement accounts alone which considering we started in 2004 it’s pretty amazing. We also have about $50,000 in Metropolitan (2% interest/Emergency fund) and about $250,000 in a taxable account. This will sound crazy, but I look forward to turning 50 for all the catch up contributions!! My current job also allow for the the Mega Roth IRA, which is a new option for us and I will be maxing every year to $54,000 total. As far as my investing philosophy and strategy, I am a true believer that saving trumps strategy. I am sure someone with more knowledge than I have had, could have pulled another 5 to 10% on top of what we have done so far, but I have stuck to low cost index funds and some international money in there too and cannot complain with what is happening. I probably need to dial it back a bit and not be so stock heavy (more than 90%) but we don’t need the money anytime soon and a huge drop in the market, would just get us to investing more at this stage of our lives. In 20 years, I am sure that we would be 50/50 stock and bonds, but we are ok for now. Well, long story short, when it was time to move to Hawaii, our home had increased in value significantly and we were able to sell the house, pay off my student loans, the HELOC (essentially his loans) and the mortgage on the condo we had been using as a rental in where I trained. All that and we had about another $200,000 to keep for down payment for the next house. Which brings us to where we are now. The homes are so expensive here that we are thinking of renting for the next ten years. It’s nice not to have all the responsibility of a new home, taxes, insurances, upkeep and anything else is not our problem. The money we won’t put toward the mortgage will go into a taxable account in a low cost index fund and at that point if we need to move or go elsewhere to buy the money is there. And on a very visceral level, since we technically own a townhome in Arizona, I don’t feel like we are homeless.

Financial Regret:

My one financial regret is: when our group closed the 457 we had an option of rolling it into our new 401k or cashing it out without the penalty. It was about $73,000 and we cashed it out because we had just bought a house and were remodeling. In the end, it is all gone and we had to pay taxes on it that year. In retrospect, I wish it was still in our retirement account. But on the other side, all the money we put into that house came back to us in folds.

One thing you wish you knew:

I wish I had paid off all of our loans much sooner. I had no reason not to have paid it off sooner. When I had money collecting 1% in ally bank and the same amount in student loans charging me 3% interest, it makes no sense why I didn’t pay it all off then. But I think since we were always about to move etc. I didn’t want to not have immediate access to a large sum of liquid money. That will always stay with me. I rather have 12 month emergency fund sitting somewhere than riding in my fancy boat. But that is just how my brain works I guess.

Do you have insurance?

In terms of life insurance, I have about a million on myself and 2 million on my husband. We decided to forgo my disability insurance, and my husband bought something over what the group offers (group offers $10,000 own individual policy, we bought an additional $13,250). We also have the umbrella insurance policy as well. We are in the process of updating our will (new state) and trust etc. It is very important to both of us that it is squared away.

What does FI/retirement mean to you? What does it look like?

I can imagine wanting to do what I do indefinitely, and if the girls are gone to college I may up it to full time for three years to benefit our pension policy that goes off of highest salary of your 3 consecutive years of service the last 10 years. At the same time, my hubby loves what he does and would love to keep doing what he does, we both hope for more vacation than we have now, so we can travel more freely. Ideally, I would like 6-8 weeks of vacation a year and I think with that, I can work forever… When I was in my last practice the cardiothoracic surgeons had 12 weeks off a year. That is NICE! I’ll take that too if that is ever an option.

Do you give to charity? If so, where and why?

As for charity, I have been giving locally (local NPR) and globally (Doctors Without Borders) for years. I also, pay a lot for the girls schools’ charitable events (auctions etc).

Any parting words of wisdom?

I want to thank Bonnie, I think that since being in that group on FB and reading what people have shared, has really accentuated a philosophy that I have always had – which is live like a resident today so that you can live like a millionaire in your older years. It’s nice to be able to be generous and help friends and family and also benefit from years of education that has allowed us to have access to an income that we can use to live financial independence comfortably. At the end, delayed gratification, is a kick all on its own, and once you learn to experience it, going to a pre-planned and pre-paid two week European trip does not feel like a luxury but a necessity for your family’s mental health. Life is short, but if you play your cards wrong, it may feel painfully long for the unfortunate few.

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I loved reading Diana's story and I hope you did too. Love her no nonsense attitude!]]>

Interviews with real women physicians -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.

General Finances

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. ]]>

Interviews with real women physicians – Stella

Tell us about yourself:

I am a gastroenterologist working for Kaiser Permanente in the Bay Area but originally from Dallas, TX. My husband is a facial plastic surgeon in private practice. We’ve been out of training for ~7 years and both turning 40 this year. We live in San Francisco and have a 4 year old daughter and a son on the way this November. We are both avid travelers and foodies. I often hear the advice to move out of a HCOL area but to us, we love the city and all it has to offer and feel it’s worth it.

Did you graduate with student loans?

I had ~$120k in student loans following med school. I went to The University of Texas at Austin for undergrad and a public in-state med school. I’m the youngest of 6 kids and my family was not wealthy so I received grants and loans to get through my education, including Pell grants. I paid off the highest interest private loan (~$20k) when I worked as a hospitalist in between residency and fellowship but otherwise deferred my loans during training. I consolidated the loans with ACS. Luckily the interest on the remainder of my loans were relatively low at ~3%, and I paid them off in one fell swoop 5 years out of training. I would have done it sooner, but my then FA discouraged me from doing so stating it was “good debt” that helps my credit score and I’d be better off investing in the market w/ better returns. Glad I didn’t listen to that advice as it feels good to be almost debt free.

Financial aspects of kids

When did you have them?

We had our daughter 3 years after becoming an attending.

Are you planning to fund their college expenses?

My husband and I had completely different experiences in this regard growing up. As I mentioned earlier, my parents didn’t have much so I got through school with loans and work study programs in college. Even though this made me independent and resilient, I did feel limited in the options of where to attend school. I didn’t bother applying out of state or to expensive private universities. I think in retrospect I did fine for myself, but it must be refreshing to not have finances hinder the “the sky’s the limit” mentality. My husband’s family in contrast paid for 4 years at Stanford undergrad and out of state medical school including living expenses. Not only that but they also set up a modest trust fund for him that matured in his late 20’s to get a jump start on life. Despite this, he is incredibly grounded and rational with money. In fact, between the 2 of us, I tend to be the spendthrift. I often have to convince him to loosen up the pursestrings. We plan on fully funding for 4 year private school and grad school if need be. Partly this is cultural and partly this stems from both of our experiences. I think the most important factor is that we try to instill in our children a sense of hard work and empathy for others. We are front loading $140k for each kid early on in the Utah 529 and leaving it alone to let compound interest work its magic. We’ll bankroll the rest if that isn’t enough to cover the costs by the time they’re in school. If we’ve overfunded then I’ll transfer the beneficiary to nieces/nephews or perhaps grandkids. After 5 years out from front loading the 529, I’m considering funding an irrevocable trust for our kids that matures around age 30 similar to what my husband had as a starter fund. I know this is controversial and may engender “economic outpatient care” per the millionaire next door, but it was such a huge benefit for us starting out. We can fund the annual gift limit of $28k per couple without running into estate tax issues.

What are your child care expenses?

Our nanny’s take home pay was $40k a year for the first 3 years, then our daughter went to preschool. We still have a part time nanny/housekeeper who picks her up after preschool, and does all the grocery shopping/cooking/cleaning around the house. Her take home pay is ~$30k. With both of our schedules it wasn’t feasible to do daycare since we are often running late and needed the flexibility of a nanny.

Are your kids in private or public school?

My daughter is currently in a private pre K-8th grade school. It is ~$36k per year including aftercare and summer school which is pretty standard in SF. I would be lying if I said I didn’t have an existential crisis about this ALL the time. I grew up without means, a child of immigrant parents, went to public schools my whole life, and I think that really taught me resilience and how to relate to others. I’m concerned about my kids being around wealth and excess their whole lives, and I worry about how they will learn empathy for others. I’m fascinated by education policy and have read up on it quite a bit. I know all the studies and evidence that cites how diversity (socioeconomic and ethnic) is better for everyone, but when it came down to it I just couldn’t “experiment” with my child. Part of me feels like what is the point of working so hard to get where we are if we aren’t able to provide a better life than we had for our kids? I’m still working on getting clarity on this matter…we’ll see.

Financial aspects of marriage

We are legally married. I had no assets but my husband had a modest trust fund that really helped us get a jump start on life. Unfortunately it matured right after the crash in 2009, but it was still enough to pay for our wedding, start his practice without having to moonlight or take out loans, put a down payment on our home in a very HCOL area, and pay off my student loans. I recognize that I’ve lucked out in marrying someone without debt, and credit this “starter fund” with allowing us to get a headstart on our finances. We did not get a pre-nup. We are both very much of the mindset that what’s mine is yours and vice versa and trust each other inherently. This may sound naive or foolish but it’s worked for us thus far. Some couples have budgets for each other or have to ask permission to spend over a certain amount, but this is unheard of in our relationship. My husband and I agree on finances and speak openly about it–he trusts me to take care of the financial aspects for our family. I have more of an interest in personal finance and find it empowering to be knowledgeable about this stuff. Neither of us stay at home. I work 4 days a week instead of 5 which allows me some breathing room to run errands or self-care. I think the perception however is that I have much more free time so I’ve taken over the financial responsibilities for our household, which I’ve enjoyed anyways. We both are highly compensated, but he does earn more than me by a sizeable margin. However, I have the generous pension and provide our family’s health insurance through my employer. Together we earn >$1M a year. I think we both have mutual respect for each other that we both contribute equally to this relationship and not just in monetary terms.

General Finances

What’s your FI (financial independence) number?

~$9 million. We will probably need ~$350k/year to cover expenses in retirement, and I multiplied this by 25. I do get a generous pension if I stick w/ my employer at least part time until I’m 60 which I’m not including in this calculation, but it would provide ~$250k/year at retirement until death–it’s hard to pass up that deal. We may get to our FI number in 10 years, but instead of retiring, will probably cut down to 3 days a week at some point until I officially retire at 60. In the meantime, I really need to cultivate some hobbies/interests so that I can look forward to retiring to something.

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?

I’m in a transitional period after recently getting rid of our financial advisor and in between a DIY stage and robo-advising. Currently our taxables accounts are in 2 places: I’m investing on my own at Vanguard using a lazy 4 fund portfolio AND using a robo-advisor at Betterment which charges .25% of AUM. It’s my own little experiment and so far the Betterment account has outperformed my DIY account at Vanguard by a few percentage points even including their fee. Plus they tax loss harvest which I don’t have much interest in doing. I’ve easily spoken to an advisor when I’ve needed to and they gave great, unbiased advice. I haven’t quite decided which way I’ll go just yet when I do consolidate my accounts.

What is your net worth?

$3.8 million including equity in our home. Without equity it’s ~$2.5M.

How are you saving for FI/retirement?

I contribute the max $18k to my 401k at work plus I get a >$20k match. In addition, I put in ~$15k in post tax money so I can do the mega backdoor Roth IRA conversion. We each do $5,500 in backdoor Roth IRAs every year. He maxes out his 401k + 3% match. I wish he had more tax advantaged space but is limited by his S-Corp safe harbor 401k plan. I have a defined benefit pension plan that will essentially provide half of my max income yearly at retirement until death if I stay with my employer until 60. I’m not including this in my FI number but it would provide the majority of my expenses in retirement. Beyond that we put the rest of our savings in taxable accounts. Our asset allocation is 90/10 stocks/bonds and rebalance by reinvesting dividends or contributing from our savings to the asset class that’s lagging behind about every quarter (as opposed to selling any funds). I place tax-inefficient funds in my Roth IRAs (REITs, emerging market, small cap value funds), and also use low ER target date funds (with the date beyond my expected retirement date to be more aggressive) in my 401k to avoid wash sale issues with my taxable accounts. We save 25-30% of our gross income a year. We basically live off my income and his income goes straight to our savings account so we don’t miss it, which I then transfer to our taxable accounts or other investments once it reaches a certain threshold.

Biggest financial regrets:

Using a commissioned broker unknowingly as our first “financial planner” who charged a 6% front loading fee! I realized this when I looked at the paperwork from when he opened our 529 account. Opening a 529 account is super easy to do yourself and here he was skimming 6% off the top. It still makes my blood boil thinking about it, but you live and you learn. This was one of the main motivators I had to educating myself so I consider it a silver lining.
Using the financial advisor at my banking institution to open up individual bond funds for me and charging me 0.8% AUM when he wasn’t managing anything–bonds manage themselves.

One thing you wish you knew:

It takes time and a lot of reading to feel really comfortable managing your own finances. I think it took me up to 2 years of extensive reading, and I’m still learning something new things all the time. So in the meantime, it’s okay to use a financial planner if you need one–just pick a fiduciary, fee-only, NOT fee-based FA. Also, target date funds with low expense ratios are okay to use while you’re learning the ropes.

Do you give to charity? If so, where and why?

I’ve always felt strongly about contributing to charities or organizations that empower other women or invest in women owned businesses. We give ~$20k a year (with goals to contribute more in the future) to a variety of charities including Women for Women International, Planned Parenthood, ACLU, and Amnesty International. A major goal for me this year is to set up a donor advised fund (DAF) for tax efficient charitable giving. Another one of my goals this year is to set up a small need based scholarship fund at my high school alma mater in honor of my father who passed away a few years ago that will be awarded to promising females who want to major in STEM fields. And while this isn’t charity, we are investors and hold equity in my sister’s startup tea company which has a social impact component helping female Kenyan tea workers establish financial independence and care for their families.

Any parting words of wisdom?

Money affords you the opportunity to invest in meaningful projects. Now that we have some expendable income, I’ve felt this burning desire to give back and do something bigger than just practicing medicine. I’m still working on exactly how best to do that, but I’m thankful for the opportunity to explore these options.
Outsource what you can afford if it gives you more time to spend with family or doing things that bring you joy (or maintain your sanity), and don’t feel guilty about it.
Focus on gratitude–I struggle with this every day. I know that I have many advantages and am so fortunate in so many ways, but it’s easy to lose sight of this.
Don’t marry a crazy person–I know that you can’t always control who you fall in love with but if there’s early warning signs that you aren’t going to be financially compatible or they seemed destined to live paycheck to paycheck, run the other way.
Mo’ money mo’ problems–making more money brings a whole host of other issues to consider like asset protection, estate tax planning, trust funds, buying more insurance, etc. Work as much as you need and consider cutting back when you have enough.

And … that's a wrap! If you're interested in doing an interview please send me an email – I'd love to hear from you!

I hope you enjoyed reading about Stella and her family.]]>

Interviews with real women physicians – Allison

The goal of this series is to share their story so that you, my 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! I'd like to thank the women who took the time to answer these questions and if you're interested in doing this, send me an email. So let's meet this debt-free female physician rockstar – Allison.

Tell us about yourself

I am an attending in my second year out of fellowship. My husband is a new attending and is 6 months into his job. We have been married for 3 years with baby #1 currently incubating. I am a surgeon with a specialty that allows a flexible schedule. I love traveling, volunteering, and working out. I live in a larger city in Wisconsin, but still low cost of living. I REALLY wanted to live in California or Chicago, but even as a two-physician family, my husband was adamant that we could not afford it and would not meet our financial goals. We settled on Milwaukee as it’s close to Chicago, on the lake, low COL, and still large enough for both of us to find work and some diversity. I chose a specialty I thought I liked. I always expected to be in academic surgery, only to realize that I do not like it and it does not meet my life goals. If I had to do it again, I probably would not have gone to medical school. I feel like I spent so much time training to do something that is not my passion. I will work hard and do a good job as a surgeon, but it is not the job that I was put on this Earth to do. The problem is that I’ve spent so much time developing these skills I can’t remember what my passions are! The only thing that kept me going through training was the fear of student loans – I could never quit because I had to have a high income to pay them off! It was also VERY important to me that I be able to support my family without issue if I had to be the breadwinner. I now realize that there are non-clinical jobs that would allow me to pay my loans off – and one semester of tuition was still cheaper than the years of sacrifice and the 3.5 years more of medical school fees!

Did you graduate with student loans?

I went to a private college that was mostly cash flowed by parents so did not have any significant debt. I went to a public medical school and received a tuition-free scholarship for 3 of the 4 years. I still managed to graduate with $110,000 of debt, which capitalized to $180,000 by the time I finished residency and started making income-based repayments. My interest rate was 6.75% with a 0.25% reduction for automatic withdrawal. The moment in fellowship that I accepted that I could not do this job full-time or forever and be happy was the moment I ditched PSLF. I am SO glad I did for many reasons. As a person with $180K in debt, yes, I was thrilled to find a program where the government would pay off my loans! All I had to do in return was my 7 years of training and IBR at less than $500/month and 3 years of IBR on an attending salary. What a steal! As a taxpayer, I do not think it’s right that taxes go toward paying for the nice apartment I had in medical school, the international travel I did on student loans, or the interest that accumulated and I ignored to buy myself a condo and new car instead of paying what I owed. Therefore, I decided I would delay gratification and pay off those student loans so I could be debt free! I paid them off in 14 months after fellowship. But, the first 3 months after fellowship I spent traveling and volunteering abroad. I used my first paycheck to celebrate and took 2 vacations: I took my mom on a 2-week tour of Europe (she never goes on vacation and would not be able to afford it) and then I took my husband on an African safari. It was SO painful, but I don’t have a debt in the world and it’s priceless! I have decreased my work to part-time because I only have rent and insurance to pay and am no longer concerned with PSLF. I did not refinance because I knew my goal was to pay it off immediately and wanted every incentive to do so. During my debt-free journey I spent~ 2.5 months to volunteer with my husband in Africa as well as splurge on a vacation to the Maldives. I also volunteered abroad with refugees for about another month. Those breaks rejuvenated me to work harder and finish off the debt quickly. They also reminded me why I do like medicine and am happy I have a needed skill to provide. Sometimes, time-sensitive opportunities come up and taking a detour is worth it – as long as you still have a plan and date for freedom. In hindsight, I should have started IBR in residency instead of having a house and car payments at that time. My debt would have been much less and IBR would have seemed less painful. Again, given the current political climate, I’m still glad things worked out where I just focused and paid them off. This means I sacrificed greatly – we moved to a low COL area despite my love for big cities, I sold my house and we are still renting, we waited to have kids, I am still driving my beater car from residency, and I moonlighted in the middle of nowhere for a week or 2 at a time away from my husband. We did still take vacations for our sanity ☺.

Safari Trip

Financial aspects of kids

Baby #1 on the way as an attending. No way I could afford them time or moneywise prior to now – and I was not ready myself for this responsibility.

Are you planning to fund their college expenses?

We are planning to frontload a 529 at the beginning of next year. We are planning to fully fund our child’s college expenses if able to.

Child Care expenses?

Since I am now working part-time, we will try daycare at first and see if a nanny is needed.

Financial aspects of marriage

Are you married?

Yes, this is the first marriage for both of us.

Did you get a pre-nuptial or post-nuptial agreement?

No pre-nup. I don’t wish I had one. We are working on building our wealth together.

Do you and your partner agree on finances?

We did not see eye to eye on finances until I went through the pain of paying off my debt. I finally understood the value of money, living within my budget, and honoring my commitments to pay debt I accumulated (student loans). We now have joint investment accounts and track our savings on a spreadsheet per paycheck. We have sacrificed to have low expenses – all of our friends have bought million-dollar homes and multiple Mercedes’. We are renting, debt free, save 70% of our income, and can breathe with ease.

Is your spouse stay at home?

No. I am still not sure I want to be the childcare provider for the days I’m not working – so we will have to figure this out as we go.

Are you the breadwinner?

I have always made more because I am a couple years ahead in training than my husband. But, I am also the only one who had debt and minimal savings. We are finally on even ground debt-wise, and now he is earning more than me because I dropped to part-time. We will see how it works out in the long run.

Have you experienced a financial catastrophe?

I consider student loans a financial catastrophe. I encourage everyone to stop paying a second mortgage and clean up the debt – it takes sacrifice, possibly moving, and definitely downsizing but it IS possible to not HAVE to work and feel like you’re living paycheck to paycheck.

General Finances

What’s your FI (financial independence) number?

$10 million dollars – we plan to be there in 25-30 years. FI means I quit medicine altogether. We are financially stable for me to work part-time now which is great. FI means we can afford all of our needs, have a paid-off house, drop all insurances, and pay for the needs and education of our children, as well as support our mothers if needed.

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?

My husband handles most of it – we discuss what investments we’d like to make and he will set up the account for that. We are DIY and are glad we never got pulled into having an advisor.

What is your net worth?

+ $250K – it does NOT include home equity (we don't own a home). It is cash, retirement accounts, and investment accounts.

How are you saving for FI/retirement?

We are doing: Roth 401(k)s x 2, 457(b) x 1, backdoor Roth IRAs x 2, taxable investment accounts, and an HSA. Most retirement accounts are in a target index fund; taxable account is 90/10 stocks and bonds.

Biggest financial failure/regret:

I should have done at the very least a Roth IRA during residency. I wish I started paying my student loans in residency – you’re not that poor – more than half of America lives on your resident salary and supports a family!

One thing you wish you knew:

All of my attendings told me to defer my loans – you’ll pay them as an attending. Guess what, you have many more expenses as an attending, the interest is no longer deductible, and you are taxed so much more!

What insurances do you have?

Long-term disability and life; currently looking into umbrella.

Do you give to charity?

12.5% to church and various organizations like UNICEF. We also donate appreciated stocks so we do not have to pay the capital gains on them and it counts as charity.

Any parting words of wisdom?

I encourage medical students to live frugally, and get out of medicine if you realize that this field is not for you. I also encourage residents to start paying at least the minimum amount due (do NOT defer) and try to put away money in a Roth IRA or other plan at your hospital has (many times they have 401(k)s and 403(b)s for residents, too!).

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

Wow, paying off $180K of student loan debt in 14 months! #likeaboss]]>

Interviews with real women physicians – Laura

Tell us about yourself:

I am a board-certified dermatologist practicing in Dallas, TX. I married my hubby (also an MD, same age) in 2008. We have 2 kids and a dog (our best behaved child…). I love running, reading, and travel. I live in urban Dallas, TX. My commute is 3 miles from my office, takes about 10 min door to door (not bad). I love where I live and work and feel grateful every single day. I have never lost sight of the fact that it is a rare privilege to become a doctor and even rarer to become a dermatologist. I feel very blessed. I teach medical students and residents and love sharing my knowledge with the next generation of dermatologists. I am a volunteer faculty member since 2009 and have lectured at national meetings since I graduated residency. I have always felt strongly about giving back to my field and advancing the specialty.

Did you graduate with student loans?

I graduated with $110k in student debt from medical school. I did not have any debt from college because I had a large academic scholarship to a big public university and worked part time during college. The interest rate on the $110k was 1.6%. Yes, you are reading that number correctly. I paid it off in 1 year by continuing to live frugally after I graduated residency. My hubby went to private college and medical school in NY. He graduated with $280k worth of debt from undergraduate and graduate education. His loans were recently all paid off! His interest rate was around 2.8%. We have been finished with residency since 2009, so it took 8 years.

Financial aspects of kids

When did you have them?

I had 2 kids after I finished residency. We utilize two 529 plans to fund their college education by 70%. The remainder we have set up in a brokerage account to fully fund the rest of their education. We had concerns about over funding if they decide on a Texas state school and didn’t want to face heavy penalties for withdrawing and not using the funds for education.

What are your child care expenses?

We have a nanny who we pay $800 per week. She has been with us for the past 5 years. We plan to keep her until my oldest starts driving. She arrives early every day so my husband and I can get ready for work. She works approximately 40-45 hours per week. My husband is a partner in his group and takes a lot of call. I work 4 days per week. It is priceless knowing that she is there looking after them even when we aren’t there. We never considered day care because of our hectic and sometimes unpredictable schedules. My nanny is quite flexible and if I have to stay late because of patient care issues, she has no problems working late. My parents and my husband’s parents do not live close by.

Are your kids in private or public school?

My children are both in a private pre-K and kindergarten. Cost for my youngest is $12,000 per year. Cost for the older is $17,000 per year.

Financial aspects of marriage

Are you married?

I am married to my husband legally, with no prenuptial agreement. He and I were both dirt poor residents living paycheck to paycheck when we met. It was quite an amazing experience to travel the long road that we both have been through together. When I met him, he had a beat up Ford Taurus, with no mirrors and no air conditioning. We rolled down the windows back then. The car would bottom out when we went over a bump in the road and we were too poor to fix it. We have a joint account and separate accounts too. We are very open about finances and think almost exactly alike when it comes to finances. We meet with our financial advisor once a quarter and discuss the future openly. My husband was the breadwinner for the first 7 years of our marriage. Now – I am the breadwinner! Feels good. [caption id="attachment_1494" align="aligncenter" width="640"]

Dallas skyline[/caption]

General Finances

My financial priorities are: children's education, charity, paying off all debts, and living below our means. We use a financial advisor through Ameriprise. He charges 1% AUM (not including the 529s and variable universal life insurance policies x 2). He has been great. He has assisted with asset protection, wills, advance directives, and was very helpful in dealing with my personal accountant and practice accountants on various issues. We meet with him quarterly in person or via webinar.

What is your net worth?

Our net worth: $2.6 million. This includes the $200k we have in VUL policies and equity in our home. We hope to keep saving and leave a legacy for our children.

How are you saving for FI/retirement?

We max out our 401k(s)/profit sharing x 2. We are in a moderate aggressive portfolio with Ameriprise. We also have a joint brokerage that we contribute each month to ($5k per month per person). We have and max out a health savings account. We do $700 per month per child to the 529 plans. We superfund our VUL policy ($3500 per month per person). Anything in excess goes to paying off our mortgage. Our cars are paid off. Our home will be paid off in 2 years (by age 40), or shortly thereafter. We live in a modest, older home. Our mortgage is very affordable. We do not live beyond our means. We do not like debt or believe in having a lot of debt. I clip coupons and use the Target app. I shop sales.

Do you have insurance?

We have two variable universal life insurance policies at 2 million each. We have disability insurance and business overhead insurance (for my practice). We have a 4 million umbrella policy through IDS Property Casualty Company. We have car insurance, homeowner’s insurance, also through IDS.

What does FI/retirement mean to you?

Retirement to me means cutting back to 3 days per week…but I actually love what I do and could see myself working for many, many years. My husband and I would like to do mission work or healthcare work in underserved countries when our children are older (in college). We figure they always need doctors in underserved, impoverished countries. We would love to travel and help others with our skill set. God willing, I hope I stay healthy and be able to work for a long time!

Do you give to charity?

Every year, we give to the Catholic church ($40,000+), Crohn's and Colitis society ($2,000-5,000), and this year plan to donate to the ASDS (American Society for Dermatologic Surgery) – looking to do a large donation.

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

Laura and her husband are on track for financial freedom. Note the common themes in this series on living below your means to achieve this.]]>

Interviews with real women physicians – Clarissa

Tell us about yourself:

I am an Internal Medicine trained Hospitalist, mom of 2 preteens and married to my husband for over 10 years. I have been an attending for almost 12 years. I grew up in the South and have chosen to live there as well. I love to read and am finally in a place where time and finances are allowing a healthy travel life. I have always been on the frugal side and have managed to build some wealth this way but have really kicked it in gear this year (partly inspired by Doc Moms Finance Group on Facebook) to really make my money work for me and build wealth more quickly. In the past year, I've cut down on the shifts I have worked but have still been able to save more than I previously had by making smarter and more deliberate choices. I think was born to be an internist and have no qualms about the specialty I picked. I do like the flexibility of hospitalist work in that I can have some very intense periods of patient care and then be completely off. Its taken me awhile to find the right balance but I feel that I have found it in the past year. Having a spouse (or family or hired help) that can really dive in with the child care and housework is really a must for the hospitalist career to work for me. It does involve several weekends, holidays and evenings. I love the flexibility Internal Medicine gives to women even if you don't specialize. You have the most leverage if you can be per diem and don't depend on benefits. The hourly rate for hospitalist is very good and now that I found a schedule that works for me I have no regrets. I often tell medical students to pick a career where they feel the quality of their work and commitment while they are at work won't suffer if they plan to have kids. Although I work less, I am totally committed to my patients when I am in the hospital (this is the reason I picked a shift work type career). I live in a big city in the south. The cost of living is rising but much better than East coast or West coast and the lack of state income tax helps in reducing costs. I don't think I could work as little as I do if I was in a different HCOL area.

Did you graduate with student loans?

I was very lucky in that my parents valued education above all else and my education was paid for. I went to a private undergraduate university but finished in 3 years with AP credit. I chose to go to a public state school which helped tremendously too (about 10K a year) . Because I had a certain amount budgeted for living expenses a year, I was careful with that money and often spent less than my colleagues that had loans because I was very debt averse. Knowing the advantage that no student loans gave me, one of my financial goals is to at least pay for the undergraduate education for my children.

Financial aspects of kids

I had my first child as I was finishing my residency and my second 2 years after that. In some ways I would have liked to have more but circumstances had us stop at 2 . I also wasn't sure it would be feasible to fund the education of 3 children with my salary. Early on, we had a nanny which was a lifesaver for us. It probably cost us about $2000-2500 a month but the cost was much more reasonable than what I see people paying now. We did this for about 3-4 years. When we moved to our current city, our top priority was to be a great public school zone and we have managed to keep them in public school. This has been one of the number one ways that we have managed to build wealth. If it was the choice between a bad education and paying the cost, I would definitely pay but putting everything in place for them go to great public schools has paid off very well. On a side note, I think the pressure of lifestyle creep is less in the public school crowd (although can still be there if you live in an expensive area). As mentioned before, our intent is to pay for undergraduate education in full for both of our kids.

Financial aspects of marriage

I have been married for almost 14 years. My husband and I married at the start of each of our careers. We didn't get a prenuptial agreement because we started out without any significant assets or previous children (first marriage for both). We are both similar in our philosophies– stay away from debt, live below our means and try to give generously when able. I handle 95 % of the finances because I enjoy it and it comes more naturally to me. Also as the primary breadwinner, I am more aware of what is coming in and going out. A few years ago, my husband made the decision to be a SAHD. He was unhappy with his work. Overall (after taxes, child care, etc) it didn't make a significant impact on our finances for him to stay. In general, he enjoys it and ideally, now that our kids are older, he would like some flexible contract work but it enhances both our quality of lives (and our kids) for him to be mainly a SAHD. There is less of a logistical headache with pick ups and summers and we can travel more with my flexible schedule. It definitely can be socially isolating for a man to be a SAHD but I think as more men choose this path, there will be more of a community and more get togethers. It can be emotionally hard to bear the burden of all the family's income but in the end I think the tradeoff is worth it for us. I think the only way it works is if both partners agree that it is the best arrangement.

Have you experienced a financial catastrophe?

My biggest mistake/catastrophe is that I should have signed up for disability insurance early in my career (like right out of residency) before I had any dings in my medical history. Even the most minor things can get you “blacklisted.” Luckily, I have a good policy through my employer but am limited in my job choices until I can become financially independent by my ability to get disability.

General Finances

Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?

I handle the finances in our relationship. We have met with advisors a couple of times in the past 5 years and adjusted our big picture accordingly (made sure we had wills, enough life insurance, started a taxable brokerage account) but I do the day to day stuff. Our invested money currently is either in targeted funds for retirement or college or in the Bogleheads portfolio. I keep it super simple.

What is your net worth?

Our net worth at this point without 529s is about $850K, this includes equity in our home.

How are you saving for FI/retirement?

For retirement, I have contributed max amounts to 403(b) for the past 10 years and get a fairly good match. I am just now wading into my hospital's 457(b) and a taxable brokerage account to augment. I will also be more diligent about yearly Backdoor Roth and spousal Roth IRAs. My 403(b) and Roth IRA is invested in a target fund. My taxable brokerage account is in a Bogleheads-type portfolio (40% bonds, 12% international and 48% total stock market) – it's more conservative because we may use it for short term issues as well . I rebalance the retirement accounts quarterly.

One thing you wish you knew:

I waited a year before I started contributing to retirement during my first job and didn't contribute at all during residency so I missed out on free money with employer match that year. I also didn't invest in a Roth IRA like I should have. Other things I wish I had done is just taken a few hours to learn more about investments and expense ratios. We had money from previous jobs just sitting there doing nothing until we consolidated them all and put them in low fee accounts.

Do you have insurance?

Long term disability is through my work and I bought a small supplemental policy when I left my job which is not great but is better than nothing. As of now, I thankfully have never had to use my policy.

What does FI/retirement mean to you? What does it look like?

Financial independence to me means only working if I want to. I don't have a specific age but hope to get there at about age 55.

Do you give to charity? If so, where and why?

We try to give at least $15-20K a year to charity – split between my church, fundraisers for reputable organizations my friends are involved in, Compassion International, kids' school and International Justice Mission. The reasons we give are multifold but from a religious perspective, we are called to tithe. Also, i feel that “to whom much has been given, much is expected.”

Any parting words of wisdom?

It's been a great year of organization and growth for me in the past year (thanks to the invigorating and encouraging community of Doc Moms Financial Group). My top pieces of advice are: Get started early It's easy to let the details overwhelm you. In retrospect, I wish I had started putting money consistently away even if they weren't perfect investments (by this I mean, even just 1 moderately well performing index fund would have been better than letting money languish). Don't let perfect be the enemy of the good. Take the time and effort (not as much as you think) to consolidate accounts It really doesn't take that much time to consolidate accounts and it gives you a lot more insight/wisdom. This year, my husband consolidated all of his accounts into a new Roth IRA. I consolidated my Profit sharing accounts and 401(k)/403(b)s into either Vanguard or my current employer's 403(b). I think this was about 5 different accounts. The people on the receiving end are very helpful. We lost a lot of virtual gains by letting money sit in accounts that were not well invested and charged high fees. Live below your means We are overall pretty good about this but there is always room for improvement. Ignore what people around you are buying and doing. If you looked at my coworkers who have the most enviable lives, they are also the ones with the lowest net worth. It's not worth it. If you can control your costs, it gives you so much flexibility in how much you work, where you can travel, etc. Bargains aren't bargains if you don't need them I have been totally guilty of buying too much off the clearance rack. As a result, I give a lot of clothes away that still have tags on them. I am trying to embrace a more minimalistic mindset. The savings in cost and clutter are amazing. I highly recommend Joshua Becker's “Becoming Minimalist ” blog and Facebook page.

And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!

I loved reading Clarissa's story and I hope you did too. She's a pretty wise lady.]]>