5 Ways Busy Docs Make Easy $

 

  1. Use credit cards.

Credit cards save me time. I don’t carry or count any cash. I know down to the penny (if I’d like) where my money goes because it’s all charged on 1 credit card.

Credit cards save me $. I get to buy 4k of grocery gift cards at once, taking advantage of the once a year 90 cents on the dollar purchase of Sprouts Farmer’s Market gift card. I don’t 4k of cash, my credit limit allows me to do things I can’t do otherwise.

Credit cards gives me cash! I got 20% cash back from discover card for a 4k purchase. That’s $800. Not a small chunk of money, especially given that I did no work but to buy what I needed anyways….

  1. Stop repeating yourself. YouTube it.

Have you found yourself constantly being consulted or sought after for advice/guidance in a particular subject? I do. I’m sure you do too. You are a doctor! How about saying it ONCE and say it perfectly with a script, recorded as YouTube videos. Refer your patients, friends, and dear family members to the videos!

These videos will make you $ in 2 ways, one save you time (time is $, yet $ can’t buy back your time in repeating yourself the millionth time), and secondly each view of your YouTube video generates I think about 1/1000-1/10000 dollars.

I love to help others, but it is not fun or productive to say the same thing over and over to different people. Kindly refer them to the comprehensive and thorough videos you make. Free yourself to relax, be with your loved ones, pick up a new hobby, anything!

  1. Replicate yourself. Blog it. Publish it on PMD!

Similar idea as YouTube. If you more introverted, just blog your experiences. You’d be amazed how many people find your journey, your trials and tribulations helpful to their own journey. Millions of people can benefit from one post you write, which may only take you a few hours. Not to mention once you’ve served numerous readers, advertisers and sponsors come knocking at your door, offering to pay you for spaces on your website!

  1. Write a book.

This is super simple once you started blogging. Compile your best posts and link them logically with a good flow. Walla you got a book! That’s who White Coat Investor got his best-selling book that generated him 100s of 1000s of dollars while he wasn’t lifting a finger (once the book is published).

  1. Spend less.

It’s true a penny saved is 2 pennies made/earned. I’d venture to add that, a penny saved is a million made. Anything you save and mindfully manage by investing passively with patience and discipline, will follow the rule of 72 and double, quadruple, and octal in due time.

One penny today, if it double every day, at the end of a month of 30 days, will be worth ~ 5 million. That’s why I say a penny saved is a million made!

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

5 Doctor-Proof Rules to Wealth

We are our own worst enemies and harshest critics. I find this true frequently of my over-achieving USMLE step students who clearly master the content of medical school curriculum but suffer perpetual test anxiety and disproportionately low performance on standardized tests.

90% of the battle to getting awesome numbers (be it high scores on USMLE or high net worth/wealth) is overcoming the only person that stands in the way of each individual physician’s success: himself or herself.

As a toast to our intelligence, diligence, and discipline dedicated to our profession, I hope these 5 principles will make doctors rich in spite of themselves.

1.       Pay yourself first by never seeing your money in the first place.

Auto deposit into your index funds with every paycheck. Set goals to max out your 401k to get the max company match and stash away the maximum you can. Above and beyond 401k, you can set up back door Roth IRA (by regularly contributing to traditional IRA with the intention to convert to Roth by paying taxes) or Roth IRA (if you are still PGY and have relatively low income compared to attending years.) There are plenty other tax-advantaged saving accounts such as 403B, 457B, , 529, HSA, Childcare related spending accounts. For self-employee doctors, you get to stow away even more into SEP-IRA, Profit-Sharing Plan, Keogh or solo 401k. Beyond the tax-advantaged accounts, there’s still taxable brokerage account where you may also automate paying yourself per check.

There’s no end to paying yourself. Set up a goal and pay yourself automatically, before the money even gets deposited into your bank account.

2.       Be the bank.
Collect interest from others. Invest in assets that will generate more money for you rather than just spend. Especially avoid spending money on liabilities, things that will take money out of your pocket. Before you lend your money away like a bank does, always ask, what is my rate of investment (ROI)?
The higher the ROI, the higher you should prioritize investing in this instrument be it index funds, real estate or other creative ventures you may discover.
And of course, risks you take should be proportional to ROI. Never take unwarranted risks, just like you won’t recommend a treatment where risks greatly outweighs the benefits to a patient, don’t do that to yourself and your loved ones.

3.       Avoid the bank, unless they are lending you negative to 0% interest rate money.
Tomorrow is uncertain. If you can pay down a debt with 6.8% interest rate today and make that guaranteed 6.8% tax free R.O.I., I’d say go for it. Since none of us know for sure we will land a PSLF-eligible job upon finishing training, paying down debt aggressively does feel pretty amazing.
I admire how much Dave Ramsey helped the poor, but I can’t agree with him on paying the smallest debt first. Numerically, always tackle the debt, regardless of size, with the highest interest first. In fact, convert debt with higher interest to lower interest anyway you can, including refinancing, home equity loans, or using credit card resourcefully.

4.       Use your assets to pay for luxuries.
Want that fast car or larger home? They are both liabilities, things that will take money out of your pocket rather than put money into it.
So first invest in assets, which make you money before going for these costly liabilities. Use the income generated from your assets to pay for your splurges.
For instance, instead of buying a 100k car, you bought some index funds. The 100k in index funds grew to 200k in 9 years, you then use the 100k from your 100k investment to buy the car. Sure you waited for 9 years, but you are much better off from the stand point of total wealth.
Not saying you have to delay your gratification. You can certainly find better investment opportunities and make your assets produce money faster for you to get the nice car.

Like my money hero Robert Kiyosaki said, “As a habit, I use my desire to consume to inspire and motivate my financial genius to invest.”

5.       Use other people to pay your liabilities.
You absolutely have to have to large home today? Then rent out 1-2 rooms to help you lower your mortgage liability.
Must have that fast car today, then do the “Air-B&B” for cars and share that fast car with other people who are willing to help pay your monthly car payment to lower the cost of your owning a liability.

Doctors are the worst patients because they are so used to giving orders rather than listening and taking orders. Patient compliance is nearly impossible if the patient himself or herself is a doctor.
Since our biggest weakness and enemy frequently may be ourselves, we need to set up our finances in a doctor-proof manner that we don’t stop ourselves from getting rich!

 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 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.