Hello folks! I have something special for you today, a FIRE-side chat with Physician On FIRE. The FIRE-side chat is an interview series I’ve started to share the journey toward FIRE (Financial Independence Retiring Early) from others. I’m a believer that personal finance is personal and it is important to find our own path toward FIRE. I think hearing from others is a great way to help us formulate our own ideas and our own path.
So without further ado, let’s hear from the good Doc!
A FIRE-side Chat
First, tell me a little bit about yourself. Who you are and what’s your story?
I’m the one they call Dr. Feelgood. I’m the one that makes you feel alright.
By day (and often by night), I’m your friendly neighborhood anesthesiologist. After college, medical school, and a four year residency, I started working in the real world at the ripe young age of 30. More than ten years later, I’ve got a lovely wife, two boys (now 6 and 8), two homes, and a dog.
One of my first posts was titled My Story, so I’ll send you there for more details.
Oh, and I’m gonna be your Frankenstein!
When did your interest in personal finance begin? Did your parents have an active role in your financial literacy growing up?
I started stealing from the change jar when I was 17 months. By the time I was four, I had over $1,500 in the piggy bank. The compound interest on that “investment” alone has netted me tens of thousands by now.
Ok. I made that up.
But my parents were instrumental in helping me understand personal finance. My father taught me the Rule of 72 when I was a pre-teen. We learned to spend from an allowance rather than just ask for money. We shopped frequently at thrift stores and garage sales for sport. In high school, I balanced school, athletics, and a part time job. My parents helped me invest my earnings in Certificates of Deposit, where I could earn a better interest rate than a savings account.
I also started an IRA late in my teenage years, and my parents helped me make a Roth conversion when the option became available. A couple decades later, I am returning the favor, helping them simplify a complex portfolio that had been managed professionally for a handsome fee.
At what point did you learn about and begin your FIRE journey?
One could argue that my journey began when I mowed lawns in my early teens, or when I earned scholarships to spend eight years at a public University, earning my M.D. with substantially less debt than I would have otherwise.
In reality, I made a lot of smart money decisions along the way, but I wasn’t familiar with the concept of financial independence, and hadn’t thought much about retiring early until I was in my late thirties. Like so many others, my inception came via an article about Mr. Money Mustache.
I took stock of my investments (so to speak) and realized we were one transaction away from having financial independence already. Within a year, we were finally able to sell the home we had built in a town where our hospital went bankrupt, and we had reached our number.
FIRE Journey Questions:
Where are you currently on your path toward FIRE? Just starting, retired already, or somewhere in the middle?
I achieved financial independence based on current spending about a year and a half ago. It’s difficult to know exactly what our future expenses will be (healthcare of all things being a big questionmark). My best guess is that we’ve got about 30x our future annual expenses, and I’m going to work at least another year. We’re shooting for financial freedom, which I’ve defined as having the ability to double your discretionary expenses without violating a 4% withdrawal rate.
I most likely retire by 45, although I have contemplated working in a limited capacity as a transition to retirement. I detailed the reasons I didn’t hang up the stethoscope the moment I became FI in this post, the Top 5 Reasons I Chose Not to Retire at 39.
If you are already in FIRE, reflect on your path and if there were any things you would change if you had to do it again? Or conversely, what would you make sure you do again on your journey?
I came up with a Top 5 Things I’d Tell My Younger Self. In summary:
- You don’t need to build a 4,000 square foot home.
- Take some time off.
- There’s a site called Bogleheads. Become familiar.
- It’s OK to say No and “regretfully decline” invitations to serve the hospital’s administration.
- Buy AAPL. And the Giants will upset the undefeated Patriots.
Tell me how you would consider your FIRE journey to be unique.
My FIRE journey is soooooo unique. Just like yours, and everyone else’s. A snowflake, if you will.
I’m not the first physician to contemplate or follow through with an early retirement, but I’m the only one writing a blog focused on FIRE. I started my career with a net worth of about Zero at age 30, an age which a few FIRE focused individuals had already retired. A solid salary has allowed me to catch up rather quickly, though.
Compared to most physicians, we’re relatively frugal, although we do live a bit better than the average American family. Our annual spending the last couple years has been between $60,000 and $70,000. I budget at least $75,000 a year in retirement when we’re responsible for a larger portion of our healthcare expenses.
Strategizing FIRE Questions:
What has been your primary motivation to reach FIRE?
Of course, I’ve got a Top 5 for that, too. My primary motivation is to reduce stress, live healthier, and have more time for my family and hobbies. Pretty much everything on the list of proven ways to be happier will be easier to accomplish as an early retiree.
What has been your greatest success in the “engineering” your life path or lifestyle? Or are you more of the “go with the flow” type?
It feels like I more or less stumbled into this position, although we’ve been more intentional in the last couple years, actually tracking expenses, and keeping a keener eye on our investments. Earning a high salary, and not acting rich have been keys to our success. Investment returns during my decade-long career have been good, but our savings rate is what got us here.
I can’t remember where I heard this first, but I hold dear the advice that it is important to “retire to” something rather than “retiring from” something. What will you be retiring to?
I can’t remember where I heard this first, but I’ve heard a number of early retirees say that they’ve got so much to do, they don’t know how they ever had time to work. Conversely, I’ve read about others who became bored when they stopped working because their work defined them. I believe I’ll be in the former category.
We’ve got a few big ideas that could be year-long adventures for my family. In this post, I detail our potential plans for a year working in New Zealand or Australia, a year in a true Spanish immersion experience, and an epic motorhome trip throughout the lower 48 states. I’ve also listed 50 things I’d like to do in early retirement.
What will your housing situation be like in retirement? Do you plan on moving to a low cost area, to the beach or mountains? Or will you become nomadic, traveling the world more freely?
We’ve lived exclusively in low cost areas thus far. If we follow through with our grand plans above, it wouldn’t make much sense to maintain two homes. It may be that we sell our primary home, use our small cabin as a home base in between adventures. Eventually, we’ll want more than a 2-bedroom, 1-bath space, though.
Wealth Creation Questions:
Retiring early is quite an extraordinary feat…and requires some pretty extraordinary behaviors to rapidly create wealth. In your focus on wealth creation, do you tend to gravitate toward making more money or arresting expenses?
I chose a career that pays well, and our lifestyle gives us stealth wealth. We try to align our spending with our values, not wasting money on things that won’t improve our lives, but not being afraid to spend on the things we want.
What has been one of your biggest successes in either advancing your career to make more money or taking control on the expense side to progress on your journey toward FIRE?
Early in my career, I took every opportunity to work extra shifts. My income has been relatively flat over the last ten years, but I started at a pretty high level.
In terms of controlling expenses, we built the “dream home”, and things didn’t work out there. We learned that a large home should not be viewed as investment. Or, if it is, it should be viewed as a speculative, risky investment with substantial carrying costs. We spent about half as much on our current home than we did on our first home.
While controlling expenses are important, you still need to live and enjoy life. What is one or two of your favorite areas to spend money on?
Travel. We love visiting new places, and my wife and I take a number of vacations with and without our boys every year. This fall, we saw a flash sale on tickets to Paris over spring break. So we’re taking our boys there, with a couple days in Iceland on the way.
Our other big splurge is charitable giving. We’ve been giving to and from our donor advised funds for several years, and we currently have nearly $200,000 invested in them. I have pledged to give half of our website revenue to charity, largely via our DAF.
If you won the lottery or received a large inheritance to the tune of $1 million or so, what would you do with it and why?
I would make $Ten Factorial our target for an early retirement. Right now, it’s a bit lower. I don’t think it would alter our current timeline to leave my full time job in the summer of 2018, but I might choose not to work in Australia or New Zealand, but simply slow travel through them instead. That is still a possibility I’m entertaining, and I have no expectation of such an inheritance.
Additionally, I would be less enticed by the freebies offered by the McDonald’s app on my phone. Maybe.
What advice would you give to folks considering or just starting their journey toward FIRE?
Enjoy the present.
Frankly, if I had early retirement on the brain when I was in school, training, or early career, it would have been an awfully long slog. Focus on a solid savings rate that is achievable without undue sacrifice. I challenge physicians to live on half their take-home pay, but that could be challenging at lower salaries.
One key to a happy life is to remain relatively happy throughout life. You don’t want to spend a decade or two of your best years in a miserable state in order to achieve a monetary goal. Balance is difficult to achieve, but try your best. If your current setup isn’t working out, do something different.
If you are a fellow blogger, where can I find you?
I might be bellied up at a local brewery, cheering on my alma mater at the football stadium, or camping on a beach somewhere. But more likely than not, I’m either at work or sitting in front of my computer, working on another post for physicianonfire.com.
Thanks for sitting down and chatting, Physician on FIRE! I had a great time!
I hope you give the Doc a follow and check out his blog. Look for more FIRE-Side chats to be featured here in the future. And if you are interested in a FIRE-Side chat yourself, give me a shout.
Thanks for taking a look!
The Green Swan