Financial Heroes: PoF #1 Champion for Physicians Seeking F.I.R.E.

What do you do for a living?

These hands save lives, or something like that. They do place endotracheal tubes, epidural catheters, peripheral nerve blocks, and NG tubes. I’m an anesthesiologist, and I’ve been in practice for a little more than ten years.

I’m not a big fan of the phrase “for a living.” I would never want my job to define my life. I am Living in many ways that have nothing to do with the way I earn money.

 

Rio Camuy Caves

 

Why do you blog?

Physicians earn a lot of money. Physicians spend a lot of money. Physicians burnout and have no good escape. I would like to open other doctors’ eyes to the idea that they might be better off without the lifestyle dictated by the “delayed gratification” mantra.

I want everyone to be happy, and I’m not here to say you’re doing it wrong. But we’re taught to practice evidence-based medicine, yet we’re not living evidence based lives.

I was inspired by Mr. Money Mustache and the White Coat Investor, but there is a wide gulf between their philosophies. While they do share some common ground, I’m essentially here to bridge the gap.

Also, I love to write, and the blog is a great creative outlet for me, which is something I haven’t had before.

 

Why is your blog awesome?

It’s not. But if it was, it would be from some combination of life experience, attention to detail, humor, a love of numbers, and beer. I have a 4 physicians series that I’m proud of, I write about taxes, frugality, lots of Top 5 lists, investing of course, and some physician issues as well.

I put a lot of time and thought into each post, including this one. When I care about something, I put a lot of effort into it. The blog is like my third baby, but I would drop it in a heartbeat for either of the first two if necesssary.

 

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How many days left until you obtain financial independence?

T-plus about 11 months. I didn’t start the blog until a few months after I was able to declare financial independence. I started tracking our family’s spending about the time I believed I could declare FI, and I’m happy to say that I was right.

I figure a FIRE blog (Financial Independence, Retire Early) would be more meaningful coming from someone who has walked the walk. Of course, following someone beginning their own journey, and chronicling their progress, can be powerful as well.

 

Any sage advice on money and marriage?

While opposites may attract, it’s best to be on the same money page as your partner. It’s no secret that finances are the number one source of conflict in a relationship.

When you get married, spend more on your guests and friends in the wedding party and less on the flowers and fleeting nonsense. When married, don’t let small money matters interfere with the things that really matter. If you want to be on a fast track to financial independence, learn to be frugal without being cheap.

I would add that my wife is eternally grateful that she has been able to stay home to raise our children without any need to earn a living. She is well educated with a couple bachelor’s degrees and a masters, but her efforts over the past eight years have been directed towards family matters. I believe our boys have benefitted greatly, and you can’t put a price on that.

 

yes,, that’s us. no stock photos for me.

 

What are the top 10 things you’d tell your younger self?

I’ll refer you to The Top 5 Things I’d Tell My Younger Self for the first five. Those were things I would tell myself as a new attending. I’ll open it up to any age for the next five.

  1. Don’t burn bridges or hold grudges. Neither will make you feel better.

  2. Branch outside of your comfort zone in college. I had two majors: Biochemistry was one. The other, Genetics & Cell Biology. I was probably a few classes away from adding Biology and Chemistry majors. A quad major would have made me a huge science dork. I wish I had minored in something different, like Spanish or Literature or Kung Fu.

  3. It’s best to plan ahead, but remain flexible. Your plan can, and will, change. I took a meandering path to be where I am today.

  4. Don’t get too excited or distraught over any real or potential romance in your first 29 years. I only know that in hindsight, but the Right One for me came into my life just after my 29th birthday.

  5. Don’t get too excited or distraught over any real or potential Bowl / Playoff aspirations for your hometown college and professional football teams. They will eternally let you down. Expect the worst, and be pleasantly surprised with mediocrity.

 

 

What is the #1 money mistake you’ve made that want your readers to avoid?

Don’t build or buy too much house right off the bat. We overbuilt for the area, lost my job due to an impending hospital bankruptcy, and lost a boatload of money on the house. You’re a real doctor now, but that doesn’t mean the “starter home” shouldn’t apply.

An attending of mine gave a lecture to final year residents. He repeated three times: “Rent. Don’t Buy. Rent. Don’t Buy. Rent. Don’t Buy.” He knew what he was talking about. About half of all physicians leave their first job within the first couple years.

 

What are the 3 most important money lessons you teach your kid(s)?

  1. Daddy works for a living so we can have all that we have. Eventually, that will change to “Daddy used to work for a living, and saved most of what he earned, so that we can live the way we live.”
  2. Save. Invest. Repeat.
  3. Eventually, they’ll be more aware of my site’s existence, and of all the other wonderful sites on my growing blogroll. They will be very well versed in personal finance before they begin careers of their own.

 

What are the 5 smartest money moves you’ve made in your life?

  1. Married a beautiful woman more frugal than me.
  2. Lived and worked like a resident for a couple years after residency
  3. Read personal finance books. I’ve got a list of recommendations, many of which I’ve read or have come highly recommended from respected authors.
  4. Learned the Rule of 72 at a young age, and have applied it when making spending and saving decisions.
  5. Kept my fees low. Learning enough to be a DIY investor can pay dividends if you do it the right way. There’s also a way to DIY terribly.

 

Rule of 72

 

What are 3 things you’d do if money is no object?

  1. Learn to hunt and gather, because without the object called money, how would I buy anything and survive? Or feed my family? Although, that’s probably not exactly what you meant, so…
  2. Start traveling the world yesterday. Hire tour guides everywhere we go.
  3. Buy and drink a Sam Adams Utopias. I’ll probably do this eventually anyway, even with money being an object.

 

When did you first start contributing to your own Roth IRA?

Roth IRAs did not exist when I started investing in an IRA back in high school. My parents helped set this up, but I did earn the money, working my way up the ranks at the local grocery store. We converted to Roth when I was in college, when I was in a negligible tax bracket.

 

When did your child first contribute to his/her Roth IRA?

They haven’t earned any money yet, so that hasn’t happened. Get to work, kids!

 

What does financial independence mean to you?

The question sounds so simple, but it’s really not. Mathematically, I’ve gone with the definition of 25 times your family’s anticipated annual expenses.

Financial Independence has many benefits, and I’ve got a Top 5 list for that, too. For me, financial independence makes work optional. I continue to work, and yes, I’ve got a Top 5 list as to why I continued to work after achieving FI. I’ve got a lot of Top 5 lists.

I think it means I’ve won the game, but that doesn’t mean I have to stop playing. In a few years, I’ll have more than Enough, and if I feel ready to leave medicine for good at that point, I imagine I will. There will be many things that I will miss (here’s a Top 5!), but a whole lot more that I look forward to doing. Here’s 50.

 

Any questions you want to ask and answer to lend more insight to our readers?

How can I connect with you?

Well, I linked excessively to my site throughout this Q&A, so you shouldn’t have too much trouble finding my site. But if you’re still struggling, here’s a link.

I am also active on Twitter and Facebook. My Friendster account doesn’t see much action these days. Do I use what? I have no idea. What’s Tinder?

Mini Wise Money’s College Fund: Selection, Final 4

Mini Wise Money’s 529 Finalists:

 

The Vanguard 529 Savings Plan

Nevada

Nevada ‘s Vanguard 529 Savings Plan is administered by Ascensus College Savings but carries the Vanguard brand and features a wide offering of Vanguard mutual funds in its age-based and static portfolio options. Accounts can be linked to the Upromise rewards service.

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One of the strongest lenders with lots of funds, quicker closing and best rates. Apply here and get the DWM reader bonus!

Utah Educational Savings Plan (UESP)

Utah

The Utah Educational Savings Plan (UESP) state-administered 529 savings program utilizes Vanguard and Dimensional mutual funds, the State Treasurer’s fixed-income fund, and an FDIC-insured account in its five different age-based options and nine static portfolio options.

DFD DRB

Apply to DRB by clicking here, you will get $300 cash bonus and DWM will get a referral fee when you sign your contract. Win-win!

Florida 529 Savings Plan

Florida

Florida 529 Savings Plan – Instead of utilizing mutual funds, the Florida Prepaid College Board hires various money management firms to manage the separate investment pools, which are available as either static portfolios or as part of an age-based strategy.

Fidelity Arizona College Savings Plan

Arizona

The Fidelity Arizona College Savings Plan is a Fidelity-managed 529 plan follows the same approach as other Fidelity plans in Delaware, Massachusetts and New Hampshire. It features three age-based options; one using Fidelity mutual funds; one using Fidelity index mutual funds; and a third multi-firm option with portfolios that invest in funds offered by several different companies. The plans also offer 11 static options, and one option that invests in an interest-bearing deposit account.

  • What investment vehicle are you using for college savings?
  • How old is your child when you start putting money away for their university costs?
  • Which 529 plan do you like? Why?

Financial Independence at 38 (year 2023)

Let’s first talk about why I won’t retire at 38, even though I can.

  1. That’s less than 3 years out of fellowship. It would be the beginning of my professional prime as a radiologist. I’d like to use my skills and knowledge from 26 years of schooling to serve others. I get a wonderful sense of fulfillment from draining a patient’s pelvic abscess today; I will also relish saving someone’s life by making a imaging diagnosis in 7 years.
  2. I want to care for others beyond myself and my daughter (Mini Wise Money.) These people include my parents, MWM’s paternal grandparents, some of my extended family, & my sponsor child Mariela.
  3. I want to provide for MWM more than I have been blessed with growing up. While I worked 7 jobs in college trying to send meager money home to help my parents with their 30% interest rate credit card debts, I’d like MWM to have at least 1 but no more than 2 jobs in while going to school full time.
  4. I’d like to keep blogging. Blogging costs money and a lot of time. I plan to support my blog because helping others succeed financially & personally is rewarding to me.
  5. I’d like to give more. I sponsor one child now. I’d like to sponsor more. I may even adopt a child one day, so that Mini is not so lonesome when I’m in heaven one  day.

3 things to help you achieve financial independence/ability to retire sooner includes:

  1. Lower the cost of your debt by refinancing.
  2. Mindful financial practice.
  3. Make your money work for you. 

Now, let’s see how I CAN retire at 38.

I first started my calculations with my current post tax annual income of $52,671 and annual savings of $29300. My annual savings rate is 56%, which gives me financial independence (ability to retire) in 13 years.

Living, Earning, & Saving like I do today; I can retire in 13 years.
Living, Earning, & Saving like I do today; I can retire in 13 years.

Savings include 23.5k in Roth IRA & Roth 403b, as well as 1k in taxable investment & 4.8k in home equity. Note that my home equity does not exactly grow at 5% ROI (return of investment) but I have 5k of additional savings that will make the 4.8k in home equity a bonus even if it’s getting negative ROI (home value drops rather than grows.)

This does not account for the fact that in July 2020, I will get a pretty big raise from PGY to attending-hood.

Accounting for the transition into attending-hood:

My calculations with the jump in salary when finishing fellowship here:

My attending post tax annual income $160,857 (based on an ultra-conservative estimate of 250k annual income, when most rads I know are getting 300k to start at academic/VA jobs) and annual savings $137,486.

My annual savings rate is 86%, which gives me financial independence (ability to retire) in 2.8 years of finishing fellowship (8.8 years from finishing medical school.)

Read the full article  published on Physician’s Money Digest here.

Then make comment or ask questions on this blog; I usually answer them within 24-36 hours.

Mini’s College Fund, 529: Intro Part II

Broker

Broker Sold 529 plans:

In addition to fees mentioned in the prior post, you pay even more fees with broker-sold 529 plans.

Personally, I will not go through a broker, but I’ve included information for completion’s sake.

Additional fees that reduces your investment return in 529 include:

  • a “load” is a commission to your broker for selling the college savings plan to you.
  • an annual distribution fee (similar to the “12b 1 fee” charged by some mutual funds) of between 0.25% and 1.00% of your investment.
  • Many broker-sold 529 plans offer more than one class of share with different fees and expenses. Here are some key characteristics of the most common 529 plan share classes sold by brokers to their customers:
* Class A shares typically impose a front-end sales load. Front-end sales loads reduce the amount of your investment. For example, let’s say you have $1,000 and want to invest in a college savings plan with a 5% front-end load. The $50 sales load you must pay is deducted from your $1,000, and the remaining $950 is invested in the college savings plan. Class A shares usually have a lower annual distribution fee and lower overall annual expenses than other 529 share classes. In addition, your front-end load may be reduced if you invest above certain threshold amounts – this is known as a breakpoint discount. These discounts do not apply to investments in Class B or Class C shares.
* Class B shares typically do not have a front-end sales load. Instead, they may charge a fee when you withdraw money from an investment option, known as a deferred sales charge or “back-end load.” A common back-end load is the “contingent deferred sales charge” or “contingent deferred sales load” (also known as a “CDSC” or “CDSL”). The amount of this load will depend on how long you hold your investment and typically decreases to zero if you hold your investment long enough. Class B shares typically impose a higher annual distribution fee and higher overall annual expenses than Class A shares. Class B shares usually convert automatically to Class A shares if you hold your shares long enough. Be careful when investing in Class B shares.  If the beneficiary uses the money within a few years after purchasing Class B shares, you will almost always pay a contingent deferred sales charge or load in addition to higher annual fees and expenses.
* Class C shares might have an annual distribution fee, other annual expenses, and either a front- or back-end sales load. But the front- or back-end load for Class C shares tends to be lower than for Class A or Class B shares, respectively. Class C shares typically impose a higher annual distribution fee and higher overall annual expenses than Class A shares, but, unlike Class B shares, generally do not convert to another class over time. If you are a long-term investor, Class C shares may be more expensive than investing in Class A or Class B shares.

Ways to minimize 529 plan fees:

Direct-Sold 529 is the obvious choice to minimize costs and maximize returns.

  • You buy directly from the plan’s sponsor or program manager without going through a broker. This way you avoid all the middle-man fees such as sales fees from broker-sold plans.
  • Check out College Savings Plan Network list of 529’s with links to most 529 plan websites.

If you insist on getting Broker-Sold 529, you may reduce the front-end load for purchasing Class A shares by investing above certain threshold amounts. Ask your broker how to qualify for these “breakpoint discounts.”

Restrictions of a 529 plan:

  • You can only withdraw your investment in a 529 plan for eligible college expenses without incurring taxes and penalties.
  • Limited investment options.
  • Under current tax law, an account holder is only permitted to change his or her investment option once annually.
  • Additional limitations will likely apply to any 529 plan you may be considering.

Before you invest in a 529 plan, you should read the plan’s offering circular to make sure that you understand and are comfortable with any plan limitations.

529 impacts on financial aid eligibility:

529 generally reduce a student’s eligibility to for need-based financial aid. Beginning July 1, 2006, assets held in pre-paid tuition plans and college savings plans are treated as parental assets in the calculation of the expected family contribution toward college costs.

Questions to ask before investing in a 529 plan:

* Is the plan direct sold? (i.e. available directly from the state or plan sponsor)
* What fees are charged by the plan? How much of my investment goes to compensating my broker? How can I get the fees waived or reduced?
* What are the plan’s withdrawal restrictions? What types of college expenses are covered by the plan? Which colleges and universities participate in the plan?
* What types of investment options are offered by the plan? How long are contributions held before being invested?
* Does the plan offer special benefits for state residents? Would I be better off investing in my state’s plan or another plan? Does my state’s plan offer tax advantages or other benefits for investment in the plan it sponsors? If my state’s plan charges higher fees than another state’s plan, do the tax advantages or other benefits offered by my state outweigh the benefit of investing in another state’s less expensive plan?
* What limitations apply to the plan? When can an account holder change investment options, switch beneficiaries, or transfer ownership of the account to another account holder?
* Who is the program manager? When does the program manager’s current management contract expire? How has the plan performed in the past?

More information:

Offering Circulars for 529 Plans. Often called a “disclosure statement,” “disclosure document,” or “program description,” the offering circular will have detailed information about investment options, tax benefits and consequences, fees and expenses, financial aid, limitations, risks, and other specific information relating to the 529 plan. Most 529 plans post their offering circulars on publicly available websites. The National Association of State Treasurers created the College Savings Plan Network which provides links to most 529 plan websites.

Additional Information About Underlying Mutual Funds. You may want to find more about a mutual fund included in a college savings plan investment option. Additional information about a mutual fund is available in its prospectus, statement of additional information, and semiannual and annual report. Offering circulars for college savings plans often indicate how you can obtain these documents from the plan manager for no charge. You can also review these documents on the SEC’s EDGAR database.

Investment Adviser Public Disclosure Website. Many college savings plans’ program managers are registered investment advisers. You can find more about investment advisers through the Investment Adviser Public Disclosure website. On the website, you can search for an investment adviser and view the Form ADV of the adviser. Form ADV contains information about an investment adviser and its business operations as well as disclosure about certain disciplinary events involving the adviser and its key personnel.

Broker-Dealer Public Disclosure Website. You can find more about a broker through FINRA’s BrokerCheck website. On the website, you can search for any disciplinary sanctions against your broker, as well as information about his or her professional background and registration and licensing status.

Other Online Resources. You can learn more about 529 plans and other college saving options on FINRA’s Smart Saving for College website. The website contains links to other helpful sites, including the College Savings Plan Network and the Internal Revenue Service’s Publication 970 (Tax Benefits for Higher Education). FINRA’s investor alert on 529 plans also provides valuable information for investors.

To Learn More:

  1. 529 Plans: Questions and Answers (IRS)
  2. An Introduction to 529 Plans (U.S. SECURITIES AND EXCHANGE COMMISSION)
  3. 529 fee study
  4. IRS Publication 970: Tax Benefits for Education
  5. Utah Educational Savings Plan
  6. 529-plan-contribution-deadlines-for-state-tax-benefits
  7. The Experts: Are 529 Plans the Right Choice for All Families Saving to Send Their Kids to College?

Q&A with Dr. Unger M.D. Radiologist-Inventor-Entrepreneur

I’ve had the honor and pleasure to interview Dr. Unger M.D., an outstanding research radiologist-inventor-entrepreneur after destroying the long list of study on ultrasound service. He has a wonderful wife, 4 successful children, 3 companies, and over 113 issued US patents. As most physicians tend to think inside-the-box and play it safe, Dr. Unger’s ingenuity and passion about his medical inventions, his success and contribution to the society can inspire us all to be bolder and more adventurous with our professional endeavors.

Dr. Unger has founded three biotech companies. His first company, ImaRx Pharmaceutical, developed 3 FDA approved drugs and was acquired by DuPont yielding a > 20x ROI. Dr. Unger’s second company, ImaRx Therapeutics, went public and performed clinical trials in a pioneering new technology to treat stroke. Dr. Unger co-founded NuvOx, in-licensed the core patents and obtained ownership of the regulatory documents for NuvOx key product. Dr. Unger is inventor on 113 issued US patents. He is a board-certified radiologist and has an appointment as professor of radiology and biomedical engineering at the University of Arizona.

What were your most formative years? 

I went to Davis high school in Davis California, and I was the senior class president for both semesters. I did some fundraising for the high school when I was a student. One of the best things that I ever did was to start the Davis high school ski team. I was on the ski team and got a lot of parental support. One of my best friends helped me form the ski team.

Our ski team is still in existence and now win’s the entire state of California.

I had a bunch of jobs when I was a high school student. I went to UC Berkeley and I started to major in architecture and was in the college of architecture for actually three years but then I change to major in economics. Then, I had to do my pre-med so it took me five years to finish college.

In college, I was captain of the ski team and I raced in the United States Ski Association. I went to medical school at UC San Francisco, where I was in the medical student medical scientist training program which was a degree with distinction but was not a PhD.

I did not finish the program because my research advisor would not let me take an elective in Spain which I wanted to do. I finished my research project. While in medical school, I did the Iron Man Triathlon world championships in Hawaii and that’s why I went into Radiology because it turned out that several of the radiologists on the faculty at UC San Francisco had also done the Iron Man Triathlon.

How did your education at UC Berkeley and UCSF contribute to your success as a physician-entrepreneur-inventor? 

At UC San Francisco, I did research on antibodies and learned how to do laboratory techniques.  With my major in economics I knew something about business opportunities. I actually started a business in college in imports.

I was always trying to do some jobs and to make money in high school and even before high school.

When I went to Mallinckrodt Institute of Radiology at Washington University St. Louis, it was a new time for MRI and I started to make MRI contrast agents.  I later made different kinds of contrast agents and my ultrasound contrast agent took off and became a success.

When did you open your first company?  How did that go? 

I applied for my first patent I think in 1988 and I then founded my first company in 1990. I got a small business innovation research (SBIR) grant which helped with forming the company and my father made a seed investment. The first company made three FDA approved contrast agents and DuPont bought the company

 

How about your second and third companies?  

The second company was, in a way, a continuation of the first company because I was able to retain certain assets in the transaction with DuPont. The second company went public but was ultimately not successful.  My third company was founded in 2008 and is currently conducting clinical trials of a new technology that safely reverses hypoxia. We have programs in brain cancer, sickle cell disease and stroke.

What are top 3 pieces of advice for young physician entrepreneur? 

Well, be passionate about what you’re doing. If you’re not passionate about it, don’t do it.

If people say it’s a dumb idea, don’t pay attention to them.  You have to do your own research; you cannot be dissuaded by others because if something is easy, someone else would’ve done it already.

If you are doing something that is high tech and innovative, learn about SBIR grants. It is a great way to get seed capital for your venture.

 

What are top 3 pieces of advice for young physician regarding personal finance? 

Never buy a depreciating asset on credit. For example, if you are going to buy a car, pay cash.

If you can’t afford to pay cash for that car or other depreciating asset, then you should buy something cheaper.

Only purchase things on credit that you believe are going to become an appreciating asset.

Other than real estate and my own ventures, I only do index funds and bonds. I think if you’re trying to play and outperform the stock market, you are going to lose unless that is your job.  And if you’re focused on that, then you’re not going to be in a very good position to help society by advancing your knowledge and skills in medicine.

 

What are top 3 pieces of advice for work life balance? 

Well you should be passionate about your other activities and hobbies and interests.

If you’re not, then I think you’re missing out.

If you’re passionate about the other things, then you have to be able to find time to do them.  Work should be fun but you should have lots of fun with the other things you love doing.

 

What are top 3 pieces of advice for parenting? 

I’ve been very fortunate to be married to the same woman for 36 years. I think it’d be very difficult to be a single parent. Your children are actually more important than your job.  So you have to keep the high-priority and try to work with your spouse together.

You can learn more about Dr. Unger’s current company NuvoxPharma here.