I don’t practice what I preach, I haven’t really retired, and I don’t have the correct letters behind my name. 5 good reasons not to listen to a word I have to say.
PIMD welcomes Doctor On Fire as our guest. POF is a personal finance website created to inform and inspire both physicians and our patients with insightful writing from a physician who has achieved financial independence and the ability to retire early.
Didn’t you read the title? What are you doing here exactly? There are some perfectly legitimate reasons why you should simply not listen to a word I have to say.
However, here you are reading the introduction and I wouldn’t be surprised to see you continue to the bitter end.
Maybe you just read the article, scan the headlines, nod in agreement, and never go back. I won’t blame you, but I will admit that I don’t blame you In reality I want to lose you as a reader.
I want you to know what my shortcomings are, how we are likely to be different in all kinds of ways, and what other resources might be available to you.
If, after all that, you are still willing to listen to me sometimes, know that I appreciate your continued support and concern.
#1 The only two letters behind my name are MD
In 2002 she was awarded the degree of Doctor of Medicine. I haven’t used this degree since 2019, and now I’m a Money Dude, but that’s not a name for any type of actual certificate.
There are a lot of money guys and dudettes out there who have letters behind their names that actually mean something in the world of economics and investing. Theses like MBA, Ph.D. CFA or CFP.
There’s Set for Life’s Jamie Fleischner, CLU ChFC, and LUTCF. Financial advisor Donovan Sanchez, whose Confessions of a Former AUM Consultant Has Been Popular, has CFP, ChFC, CSLP and CLU behind his name.
Retire Early Now is written by Karsten Jaske, PhD, a degree in economics from the University of Minnesota while I was doing autopsies. The Oblivious Investor’s Mike Piper has his own CPA, and it shows. This guy knows his stuff, as he proved time and time again at WCICON21.
Many people have put in the time and paid the tuition to get an advanced degree directly related to the topics I like to discuss. I didn’t do anything like that.
Is there value in my masters degree now Have you retired from medicine? In the context of talking to other high-income professionals, I assume there is.
If you work in medicine or any other well-paying field outside of the business world, I know how little you’ve learned about these subjects. I didn’t know much either until I had to figure things out on my own.
I have gone through the rigors of medical school and the long days and nights of residency. I had to memorize and understand facts and concepts far more complex than anything I encountered in personal finance.
I know that if you are able to obtain an MD, DO, or other advanced degree, you can easily and quickly learn what it takes to manage your money effectively. If you’re struggling, I support you. Money is much simpler than medicine.
#2 I haven’t retired
The basic message here at Physician on FIRE is that once you achieve financial independence, you can do whatever you want with your time and money. The only limits are the ones you set for yourself.
I thought I wanted to retire. At least, I thought I did. By the time it came to hang up the handset, I had built this website and related online activities into something that required a great deal of time and attention.
If I didn’t like it, I wouldn’t, but when I first discovered the concept of FIRE in 2014, I never would have thought that I’d run a site of my own exploring these topics instead of just being a retiree in my twenties.
I have to say, though, that on the scale of my full-time MD to retired beach bum, my life is more sunscreen than scrubs. Yes, I have this emotional project, but I also have a great number of freedoms that I didn’t have in my previous life as an anesthesiologist.
I have site autonomy. The pandemic has limited that a bit, but this work of mine can be done from anywhere in the world anytime I feel like it.
Every day, I get up when I want to, not when I have to. I made time to improve my body and mind through exercise and education, and there was no longer a question of whether or not I had time to do these things.
I see more of my family than ever before. I would say we don’t take vacations anymore. We just travel and live life away from home, sometimes for months at a time.
If your vision of retiring is a Mai Tai at night on the 19th hole, I can help you find that place – and I might catch you there for a bit – but it’s not the life I’m living yet.
#3 I haven’t enacted my withdrawal plan
Once I discovered that we apparently had enough money to afford retirement, I had to devise a plan to turn my pile of money into a steady stream of tax-effective income to cover our annual spending.
This can be a difficult task, especially for early retirees, and everyone’s financial situation is different. There are ways to access retirement funds before the age of 59.5, but they require some knowledge and effort.
For example, one can set up a series of equal periodic payments (SEPP) as described in IRS rule 72
However, as I recently learned from a talk by Oblivious Investor Mike Piper, CPA (<--see these letters!), if you withdraw less than 1 year ago, you will owe a penalty on all withdrawals you made in the current and all previous years!
Fortunately, with over 50% of my business outside of retirement accounts, my withdrawal plan doesn’t require touching retirement accounts until after age 59.5, so that’s one issue I’m not worried about.
Here’s the thing, though. Even though I’ve been out of medicine for a year and a half as I write this, I had no reason to enact my well-thought-out plan. Online income covers our spending.
A few years ago, I’d have thought I’d be in a backsliding phase now — and it’s true that I’m taking my 457(b) down by starting withdrawals in 2021 — but from a purely financial standpoint, I’m happily stuck in the backlog of life for now.
I can help you decide which accounts might be best to access first and what money is readily available and when, but if you’re looking to learn from someone whose only income is passive, I’m not your man.
The psychology of going into full retirement and making regular withdrawals is certainly more challenging than the math and mechanics of enacting a withdrawal strategy. This may be why I haven’t done it yet.
Most people are mentally ready to get rid of jobs before they are financially able. For super savers like me (and maybe you), it might be just the opposite.
#4 Your life looks different than mine
On “WCICON21” by Dr. Jim Dahley, he put a few of us on a studio stage and asked what we think the financial blogosphere has been going wrong with.
I answered myself, noting that the biggest challenge was a lack of empathy. It’s not that I don’t want to associate with others. It’s hard just to pretend I know what it’s like to walk down some of these other paths that wouldn’t even have crossed paths on my own.
When I started reading blogs, I first discovered Mr. Money Mustache. Then I found The White Coat Investor and shortly thereafter, 1500 days. I enjoyed their writing styles, was learning a lot from them, and felt a connection to the lives they were leading.
One was a doctor and all were (or were) highly paid professionals. They were all relatively frugal and made a large fortune at a fairly young age. They were husbands and fathers born in North America in the mid-1970s. They were me.
I’m not saying I wouldn’t have read their blogs if they were of a different gender, age, nationality, or ethnicity. These are terrible reasons for rejecting one’s own writing, and the blogs I read and offer here on this site have expanded many hundreds of times over from those first discoveries to include a much more diverse group of talented individuals.
I am a firm believer in getting your information from a variety of perspectives. This is true of politics and politics, money and medicine, and any subject that always invites diverse opinions. Listen and silently challenge everyone’s beliefs, including your own.
However, it’s only natural to gravitate towards the words of someone whose situation in life is similar to yours, especially when it comes to money. You will want to learn from someone who thinks or has answered the same financial questions and faced the same problems that you are facing right now.
I’d like to think some of my advice is broadly applicable. Relative economics, simplistic investing, and intentional living are concepts that can be beneficial to a wide segment of the population, and these messages harm almost no one.
I also realize that there are people in dire straits who have more immediate concerns like where their next meal will come from and under what roof they will sleep tonight. While this site donates to causes designed to help them, the content here won’t be of much help to someone whose life looks a lot different than mine.
I try to educate, enlighten, and even entertain my audience, but I can’t be all things to everyone. If you find people who talk to you better than I do, I wouldn’t blame you for being distracted by them.
I will welcome you back anytime.
#5 I don’t practice what I preach
I might as well be the grumpy doctor who smokes the chain, telling you to quit smoking, eat right, exercise more, and treat people better.
A 3- or 4-fund portfolio can meet all your goals, provide amazing diversity among your investments, and can be done by a second-grader, according to Alan Roth.
I told you this and it is not uncommon. But have you seen my work?
I own emerging market funds, small and medium value funds, have made several real estate investments, and have invested in microbreweries among other startups.
I had the pleasure of getting to know the aforementioned Mr. Roth, whose 3-fund portfolio performed very well while being widely diversified.
He invests his money in a simple way via index funds and advises people who have orders of magnitude greater wealth than mine to use their dollars similarly.
However, even he admits to collecting at least two individual stocks each year. He told me that he looks for companies that have at least a 50% chance of going bankrupt.
If they do tank, his taxes are reduced through a capital loss. If they survive, their gains will generally outpace index funds by a wide margin. Once he has kept the winners for a year or more, he donates them to his donation fund.
Doing so scratches an itch that index funds can’t scratch, and exercises some gray matter that requires a little excitement. It’s a “play money” fund that contributes to his other desires, including charitable giving and reducing the tax burden.
Like Alan, I also allocate a portion of my portfolio to high-risk, high-return investments. I maintain that the size of this fund must have been small in your time before financial independence, but once you set aside 25 years of sensibly invested expenses in a diversified portfolio of stocks and bonds, as I did, much or all of the extra money can be considered play money.
While I preach the importance of a portfolio of 3 funds or similar, I give you permission to take 5% to 10% of your investment to allocate it as you wish. After faecal incontinence, feel free to increase this percentage if your personality and risk tolerance is acceptable.
Are you still with me?
The fact that you’re still reading tells me there might be something here for you after all. Either that or you want to give me a proper sendoff for reading my post from start to finish for once.
Whatever the case, there are many reasons not to hear a single word from me.
If for any reason you don’t agree with this opinion, you can always find me here at Doctor on FIRE, I do my best to help you.