5 Reasons I’m cutting My First Attending Paycheck in Half

I asked a few wise, seasoned, and revered radiologists, what is the minimum amount of work days per week a radiologist need to stay sharp in her trade? Average answer is 2 days per week.

That’s the sweet balance I want as soon as I finish residency/fellowship in 2020. I love radiology, I see myself doing it for the rest of my life. I need to stay sharp in this profession so that I can continue to saves lives and do no harm. Yet, I am ready to re-introduce all the other worthy causes of my life and start taking care of them by cutting back the time I spend in radiology, to precisely 2 days a week.

 

  1. I can retire 2.8 years after my 1st attending paycheck, but I don’t plan to.

Alternatively, I can also retire in 13 years (at age 44, still too young in my opinion) assuming I continue to get a resident’s income 50-60k annually, I’m pretty cool without a pay raise when I finish training.

Don’t get me wrong, I do enjoy watching my paycheck go from 50k to 250k (a conservative pay for a full time licensed radiologist.) But I’m definitely happy with 50k to 125k if it means I have 30 more hours/week to volunteer, learn more, write, and be with family!

  1. There is so much more I want to do with my time.

First of all, Mini has asked me numerous time to be home schooled, or at minimum that I will be her teacher. So this will likely be the first thing I do with the free time from working 2 days a week rather than 5 days a week.

Then, I’ve put lots of dreams on the back burner while I spent 80-100 hours weekly on learning, training to become the best radiologist I can be. I want to go back to working on these dreams, such as writing children’s book, traveling more, taking voice lessons, practicing to become a yoga instructor.

  1. I don’t need more money to build wealth. I’ve been doing just fine at poverty line (in medical school) and at 50-60k in residency so far.

I know really well that it’s not how much I make but how much I manage the money I make that makes me wealthy. If I can save 45k of post-tax dollars on a 75k income (2016 update) and enjoy the life without feeling any deprivation or delayed gratification, 125k income is more than plenty to give me the feeling of money flowing out of my ears and nose. The additional 125k by working 30 more hours weekly is simply not worth it.

  1. My time is more valuable than the fixed hourly dollar amount an employed radiologist gets paid. (So is yours and everybody else’s time.)

250k/52 weeks/60 hours. That’s not much. Especially after my epiphany that our hours are the most precious and irreplaceable asset we each have. I’m certainly not going to work for this money, in fact, I don’t work for money period. Today, in residency, the only reason I didn’t drop out and go make millions in business is because I find the opportunity to train, learn, challenge, and expand my intellect as physician an incredible opportunity, a priceless opportunity. That’s why while some peers may prefer the mode of “hardly working” I prefer to be “working hard.” Because I’m working to learn, not working to earn.

I will continue to practice part time as radiologist for the same reason. I’m working to learn. If I were to just work to earn, I’d be in some other profession that makes money much more effortlessly.

  1. I like my standards of living right now and don’t plan to upgrade it with the exceptions of a larger travel fund and more money for Mini’s lessons/education.

Let’s just say my take home is 100k for the 125k W2 part time radiologist job I get. That’s still 40k more than the 60k take home I get in 2016. 40k additional for travel money and education? That’s more than plenty for me! While I don’t go for 1st class plane rides, but I also enjoy wonderful food (wholesome, good quality) when we travel. Mini has also been given opportunity to try everything educational and creative as her heart so desires. The additional 40k would be pretty incredible and frankly excessive. We would most likely sponsor more 3rd world children with the big jump in income.

Update:

My initial projection of retiring in 12 years on resident income was based on 23.5k per year retirement savings. But I’m way ahead of this target saving rate! Which means, financial independence is sooner than I’d ever expected. Since I don’t plan to retire any sooner than 38, I’d like to reserve my youthful productive years for more creative projects and intellectual challenges. I can continue to work well into my 80’s as a radiologist and it is my passion, but it is not my only passion.

Perhaps a bit different from the majority of doctors, I can’t wait for the first pay cut when I finish training!

Personal Finance, Investing, Retirement, Lifestyle More articles like this on Physician’s Money Digest.

 

 

 

 

5 Reasons to Not be a Doc, If You Wanna Be Rich.

Perhaps I’m preaching to the choir.

It’s not hard to know that you are poor when you are in you 35 without a house, with a 20 year old Honda accord, without money in retirement savings, and with a student loan the size of a large mortgage (300-500k) snowballing at 2-3 times the interest rate of regular mortgage.

I am surrounded by PYG’s (residents and fellows) and freshly minted attending physicians whose financial picture is just as I described above.

In case you belong to the group that believe the contrary about physician’s financial fitness, here are 5 reasons why a career in medicine is a financially bad choice.

  1. Tuition is exorbitant.

I attended a medical school, where cost of attendance is about 85k-100k per year. That’s about 400k not counting the origination fees of student loans (ranging from 1-4%) and the interest accrued while I dig my nose in the books to learn and become the best/most knowledgeable doctor I can become.

Mini Wise Money, the apple of my eye, was 3-7 years old while I attended medical school, in order to reduce living expenses, we downsized from a $1700 rental home to a closet size bedroom for $350/month. We also lived with my parents for a year rent-free.  But my other friends with family unfortunately graduated with 400k+ of student loan debt just before starting internship PYG1 .

The 2015 AAMC debt fact card states that the average med school debt is 183k upon graduation. Taking into account some of my classmates who graduated with $0 student debt as their families had paid their med school costs, no surprise on the other end of the spectrum of this 183k average, there are plenty of med graduates with 400k of debt.

 

  1. Uncle Sam is against you.

I don’t know how else to explain why big bank can get bailed out with “free,” unclear terms tax payer dollars, yet aspiring physicians pay 1-4% loan origination fees, which instantly roll into the debt principle which the 7-11% interest rate accrues on.

It is sad to see that US banks are too big to fail yet the everyday ordinary people like you and me who aspire to devote our lives to serve others borrow at 7-11% to further our education and profession.

 

  1. Time value of money is against you.

As I wrote about how I could retire at 38 as a radiologist, and yet I could retire at 31 as a plumber, this shows precisely how time value of money works against the average physician.

Instead of making 50k steadily since the age of 18 and stocking away Roth IRA 5.5k annually, most aspiring doctors find themselves not able to afford putting away money until late in residency and in fact most doctors “wait” until they get their attending paychecks before even contemplating about retirement savings.

We are usually in our 30’s, some of us, like me, mid-30’s before we get our first attending paycheck, for which many worthy causes that have been put on hold are vying for, including Uncle Sam.

We get the pay raise, with it, tremendously higher taxes especially if we are W2 employees without business deductions. Then we start “catching up”

  1. Retirement savings
  2. Saving for a down payment for home purchase.
  3. College saving for kids.
  4. Pay down/off our student loans.
  5. Entertainment funds since we have delayed gratifications for decades on end. (pulling all-nighters studying while our non-medical friends party up after their first raise at age of 24.)

In our 20’s, time value of money worked against us as we passively allowed our debt to balloon at 7+%. In our 20’s, we miss the time value of money working for us as we did not have or did not direct cash flow to maximize our net worth/ return.

 

  1. Society is unaware and unsympathetic.

Most of society still believes doctors are rich. People of almost all trades feel justified to charge doctors more since “he/she’s a doctor. He can afford it!”

 

  1. Doctor’s price tag may be internalized.

Worst of all, the societal belief that doctors live at large frequently gets internalized by physicians themselves. To the point that when I said I could retire at age 38, the first thing other doctors (especially attending doctors) say is that “well, most doctors may want higher standards of living in retirement…” Why is an average non-doctor Jane who’s otherwise just like myself ok to retire at a certain standard living lower than that a doctor’s expected to retire?

Doctors ultimately have become victims to the doctor’s price tag society puts on them. Why can’t we give ourselves the permission to make less and live more richly in non-material ways?

 

So as I started this article, if you want to be rich, don’t be a doc.

However, if you are like me, and want the most amazing reward of saving someone’s life and/or improving one’s life quality tremendously because of your knowledge skills which you spent 1/3 of your life and ½ million dollars to acquire, medicine is still it for you.

Personal Finance, Investing, Retirement, Lifestyle More articles like this on Physician’s Money Digest.

5 Lessons a Penniless-Immigrant-Turned-Multimillionaire Aunt Taught Me

20-year-old and broken-hearted, she decided to leave Taiwan and start a new life. She literally “jumped the plane” and landed in LA California after finding her then fiancé cheated on her. She wanted a new beginning and have heard of the American dream.

It started really rough for her. She was a penniless immigrant, working menial jobs at 2-3 dollars/hour. Fast forward 30 years, she’s a multimillionaire entrepreneur R.N. who employees more than 100 people with more than 30 doctors on her payroll. She owns 5 Dialysis centers, pharmacies, health foundations, and multiple beautiful homes and condos in Southern California.

How did she do it? What are the most important lessons from her journey?

1.       Goals.
As she drove my sister and me from the LAX airport to her mansion in one of the most expensive neighborhoods in southern California, she said, in her accented English, “The #1 thing to success is to make goals. Once you make up your mind on your goal, you always find ways to accomplish it.”
At 20 year old, penniless and the first from her family to be in the US, own her own, she made up her mind to become very wealthy and to help all her family members to have a better and easier life than she did herself.
She did just that.

2.       Persistence.
She put herself through multiple training programs to get her LVN and eventually RN. It was hard to work multiple low wage jobs to pay for school and food but she did it.
Some of her business ventures failed. People flock to her when she made them money, left quickly when business ventures show any sign of weakness. But she persisted and continue to build her empire of multi-faceted medical business.

3.       Resilience.
She suffered great losses, financial, professional, and a few times personal. She lost her mother, my grandma shortly after losing her husband. She didn’t slow down with grief. She kept working hard towards her goals.
She weathered the hard time in life and in business with great resilience.

4.       Generosity.
She’s one of the most generous person I know. She’s employed and created job opportunities for all family members and friends who needed a job. I worked for her the summer before heading UC Berkeley. She tried to give me all the hours possible, allowing me to save up more than 5k before going to college.
Even though there are people who took advantage of her and back jab at her in return for her generosity, she has never lost faith in being kind and generous. She continues to help many people without jobs. Friends of friends and relatives from afar hear of her reputation and frequently ask for favors for job opportunities. As she continues to find ways to help others, she becomes more and more successful herself.

5.       Courage.
She’s a leader, not a follower. She studies her niche market and the numbers hard. Once she has her mind set on a business opportunity, she can’t be dissuaded. Sure some of the chances she took did not materialize, but the 10 or so large ventures she took became part of her medical empire which not only made her American Dream come true but also feed many families and given many their much needed job opportunities.

 If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.

5 Reasons I’m Hard Working & Happy Wherever I Go

If you are not into details, skip straight pass the blue texts, which provide the background incident that inspired me to write this post. But the 5 points are listed in the black texts following the blue ones 🙂

I was recently reminded that misery loves company. During a weekend double shift (covered by a PGY3 8a-8p and PGY2 7a-4p), which can be easily manned by a second year radiology resident (PGY3), hence most PGY3 would send the PGY2 home after the PGY2 is done with his/her dications. I could say that this is one PGY3 shift because I just came off of a 3 day weekend 8-8 call as a fresh new PGY3.

 

Anticipating I would be working 12+ hours for 4 weeks straight with just 2 days off, I was looking forward to leave the weekend shift when I’m done with dictation as a PGY2. The PGY3 was on his last day of PGY3 year and the exams were coming in slow enough that he could dictate whole reports when only impressions/preliminary reports were required of him.

 

His immediate response when I said I was hoping to leave when I get done with my dictations was a lecture how I better get used to working hard. He then proceeded to tell many people including my program director that I asked to leave early on his weekend call.

 

I was deeply hurt… I felt so blemished. But it was my fault, I gave him the opportunity to “reveal” a fact (I left early on the Sunday) to others. While I at peace with being not the smartest kid in my program,  I’m certainly one of the hardest working PGY’s in my program. In fact, because I blog/write/speak on personal finance, I work extra hard in radiology residency on day to day duties and academic research to ensure that I don’t put the “cart in front of the horses” so to speak.

IMG_2789
look how harmoniously these creatures live with one another. that’s how I like to see myself and others on this earth. supporting and helping one another.

Getting burnt this way lead me to think hard about my medical practice and interactions with my medical colleagues.

 

I realize the biggest difference between him and I is that I am happy when I work hard and I need not drag someone else along with me.

 

My positive attitude  in the face of increasing workload and responsibility is not a completely natural tendency. Yet with practice and intention, I enjoy working hard, knowing that I’m making a difference in someone’s life.

 

Here are 5 concrete reasons why I’m happiest when I’m working the hardest.

 

I’m working for knowledge and service to others, not for money.

 

As I stated before, medicine has an extremely high opportunity cost, there’s definitely innumerable easier ways to make money. For instance, as I try to calm down a frustrated clinician, explaining why a particular radiologic study might not be the best for a patient, my employees (post-tax dollars in my Roth 403b/IRA index funds) are hard at work, making more money for me. When I work 12+ hours for 3 days on July 4th weekend shift, I’m working for knowledge, to sharpen my mind so I can better serve my patients and the clinicians from all specialties who collaborate with medical imaging.

 

Since I’m working for knowledge, the harder and the more work, the more knowledge I get. Whereas someone with a sense of entitlement and is working for money, the paradigm is completely opposite, the harder and the more he works, the less his making per hour or per unit of effort.

 

Hence, the harder I work, the better radiologist I become, the happier I am i knowing that I’ve given my all to serve my patients.

I empathize with others.

 

I put myself in someone else’s shoes. This is especially easy if I just walked in those same shoes a little time ago. I’m known to be the resident who loves sending other residents (radiology or visiting clinicians) and medical students home whenever I could, even if sometimes that just means I suggests to the attending that the med students could use free time to study for boards, or PGY’s can get ready to move, etc.

 

Opposite of empathy is what some of the American founders did to those who followed their footsteps, trying to immigrate from Europe in search of religious freedom. These people who just came from Europe themselves put up tremendous barrier against those coming shortly after them. Sad. That’s all I have to say.

I build people up, not tear them down.

 

I believe in praising, in front of the person and in his/her back. I don’t believe in criticizing (no matter how subtle) anyone, particularly behind his/her back. Simple rule that my kid knows, “if you don’t have something nice to say, don’t say anything at all.”

I treat others the way I wanted to be treated.

 

Goes without saying, a kindergartner knows this.

I’m way more productive when I’m positive.

 

Time to me is the most precious resource I have. That’s why, I’ve long decided not to chase after money with my time. Instead, I follow what I love, medicine, radiology, my kiddo, yoga, and allow money to follow me (by setting up fool-proof, emotional-proof, passive investment style.) Since I only have 24 hours/day and now 16 hours/day (2 hours less than the last 15 years as I finally started sleeping more than 4 hours), I do not want to waste my breath to put any negative energy into this universe.

 

The only person I keep prisoner when sh*tting on others is myself.

5 Doctor-Proof Tips to Great Wealth: S.P.E.C.T.

Medicine is a profession of acronym, so here is one for your money and wealth. S.P.E.C.T. stands for Simple, Passive, Emotionless, Cheap, & Time.

As physicians, we know our trade well, naturally, after spending an average of 23-27 years studying and training for our profession, not to mention the additional learnedness of the M.D. PhD MBA multi-degree docs among us.

From our life experiences, which could be slightly limited given we spend most of our time studying, taking exams, listening and caring for our patients, we tend to project our level of training onto the non-medical professionals.

Let’s just get that out of way right now. The insurance agent who try to sell you whole life insurance has 2 weeks of training, most of which focused on sales techniques. Instead of paying a money doctor (financial adviser), here’s a super easy way to DIY-grow your wealth.

 

S.P.E.C.T.  Simple, Passive, Emotionless, Cheap, & Time

 

Simple

Simplicity is beauty. Keep your investment simple. There are innumerable investment portfolios with quantum gradation of asset allocation schemes. But it’s really not necessary. Index funds are by definition diversified. Some really successful investors have all of their nest eggs in one index fund, Vanguard total stock market. Want to spice it up? Go for 5 index funds. But seriously, why make it more complicated especially when complexity does NOT guarantee higher return!

 

Passive

Invest money passively, time actively. This is because money makes money and sky is the limit, yet your time is limited, as limited and as abundant as Warrant Buffet’s time, exactly 24 hours daily.

Automate your investment by paycheck withdrawal or scheduled regular withdrawal from your checking account. You pay yourself first by these automatic deductions from your cash flow, and find yourself pleasantly surprised by when you occasionally check the exponentially-growing numbers on your nest eggs.

 

Emotionless

The market goes up, the market goes down. Not in your control, and you didn’t waste any time or energy timing the market, because you know it is the time “In” the market that matters.

Don’t get emotional. It’s just numbers after all. Don’t bother logging in to check your numbers if that gets you emotional. Know that by maximizing your savings rate, you are guaranteeing yourself the fastest wealth accumulation.

Optimize what’s in your control and omit thoughts and energy for what’s not in your control.

 

Cheap

Don’t pay a money doctor 13 million for sitting his as* on your nest eggs. Go for the lowest fees possible, boost your investment/savings rate and get the lower expense ratio by hitting the higher investment threshold. Pay the cheapest taxes possible on your investment. Buy stocks on sale whenever possible: whenever there’s market down turn, buy it up. For some, dollar cost averaging through a correction is great way to go. Stash post tax/Roth money away or convert traditional to Roth IRA whenever you are in the lowest tax bracket prospectively.

Be cheap (but honest) with Uncle Sam, investment fees, and your purchase of investment by minimizing taxes, investment fees, and persistently buying (dollar cost averaging) in market corrections. Buy on the way down and on the way back up.

 

Time

Whether you are in med school, residency, or early attending years, today is the day to start building wealth if you have not started 10 years ago.

Don’t wait.

When looking back, most people regret investing and/or saving late. Few regret living frugally or creating extra sources of income (without working like a dog for money) to invest in their future.

The decade you spend in medical school and residency is key to (early) financial success. Investing today, no matter how little the dollar amount always beats catching up later.

 

If you practice S.P.E.C.T., there’s no way that you don’t become debt-free sooner and ultimately financially independent sooner than if you don’t practice S.P.E.C.T.

Why pay a money doctor with 2 weeks-2 years of training to sit on and play with your nest eggs with no guaranteed increase ROI (return of investment), when it is this simple to DIY to great wealth?

If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.