How to overcome a late start

By Bill Jackson March 30, 2023 70 mins read 171 Views

Today, our guest is Bill Yount, an emergency medicine doc who got a late start on his financial journey. He shares his experience of overinflating his lifestyle for nearly 20 years after residency before having his financial awakening. He finally realized that if he ever wanted to retire, he and his family would have to make some big changes. He talks about the struggle of deflating his lifestyle but the overall peace and happiness that has come from getting his financial ducks in a row. He shares his story to help inspire other late starters out there that it is not too late to change your habits and reach financial independence.

Listen to Episode #308 here.

Correction – Out-of-Pocket Expenses for Healthcare as Tax Deductions

We need to talk a little bit about a correction. And this came in via email from somebody who actually had something nice to say about me. She said,

“Thanks for all you do and your down-to-earth attitude. I've been able to have the fortune of meeting you in person twice in the past several years, and you're just as lovely on the air as you are in person.”

I thought that was really nice.

But the correction she gave me, which I thought was really good, is from Episode 284. I said it was pretty rare for doctors to have big out-of-pocket expenses for healthcare as tax deductions. Because remember, there's a floor on your tax deductions for healthcare expenses. It's 7.5% of your income on Schedule A. If you don't spend at least 7.5% of your income on healthcare, you can't deduct it.

But there is one category where doctors routinely spend more than 7.5% of their income on healthcare, and that's IVF. That is definitely an exception to that general rule I put out there, and I appreciate that correction. It's not unusual at all for people to spend $20,000 or $30,000 or $40,000 in a single year for healthcare. Especially if you're doing that in residency or in fellowship when your income's a little bit lower, that can easily be more than 7.5% of your income. That then becomes deductible to you on Schedule A—assuming you're itemizing, which you may not be as a resident or a fellow.

She also mentioned that as a palliative care doctor, she worries that a lot of white coat investors are optimizing rather than balancing their lives, that they're optimizing for future wealth. She wanted to remind people that we need to be careful with our usual obsessive-compulsive tendencies to maximize everything and not forget to live as we go along. Because there are plenty of patients in their 30s, 40s, 50s, etc, who get diagnosed with not necessarily a terminal illness but maybe a life-limiting illness. Find a balance in your life. I thought that was a great correction.

Catching Up to FI

Our interview today is with emergency physician Bill Yount, who you probably know from the Financial Literacy Project or perhaps his new podcast. He's going to be talking to us a lot today about some of the issues faced by those who get a late start on their finances—or at least feel like they've got a late start—and what they can do to change that and to overcome that inertia and maybe dial back their lifestyle a little bit. Welcome to The White Coat Investor podcast, Bill.

“Thanks, Jim. Thanks for having me.”

Our subject today is going to be talking about getting a late start. But I don't want to start with that. Let's go back to the beginning and start with your upbringing and particularly what it taught you about money.

“I grew up in a middle-class family. My father was a state-employed physician, and my mother was a nurse that went into the home after they got married and had kids. We didn't want for anything, but we lived in a scarcity mindset. My father was sort of fear-based, frugal to a point where his kids didn't think that there was much money, and we didn't talk about it at all. It was taboo. There were fights about it. We didn't learn a thing about it. There was no advice. We were left to fend for ourselves.”

When you left home, your assumption was there was no help coming from home?

“There was none. Absolutely none. I went away to boarding school, came back home for med school, and went away again to Chicago for residency. Throughout that, I just lived paycheck to paycheck, and I didn't learn how to partition anything. I exited residency with no idea what to do with my money other than spend it.”

That takes us through your education and training. At this point, you're coming out of residency. You are an attending emergency physician. You're making pretty good money. You really don't have a lot of financial literacy. Tell us about your financial life for the next 10-20 years.

“The best financial decision I made was to go to my state school. The tuition at that time back in the '90s was $500 a semester. It was unbelievable. I didn't have the problem of student loan debt whatsoever. The cost of a medical education was the cost of living at my state school. The only debt I had coming out of residency was consumer debt. I deserved a lot of things during residency because I was working so hard, and I think I had about $30,000 of credit card debt as I exited residency.”

What did you think about that? Did you have any sort of plan for that credit card debt? Do you feel like that was pretty normal?

“I felt like it was normal. I think Cory Fawcett talks about Debtabetic Neuropathy. I definitely had that. Debt was a part of life. It was something you did. I paid the minimums. I used zero-interest credit cards to roll the balances to. I did a lot of things that I think the general population does.”

At this point, did you work for an employer that offered a retirement plan or anything like that? Did you have any thought about retirement or saving for the future?

“I did a little bit. I knew I needed to save, and they did have a retirement plan. I'm not sure what it was at that point, whether it was a SEP IRA that I had or a 401(k). I think we were at that point, sadly, single-digit savers, no more than 10%.”

More information here:

Here’s Why Doctors Don’t Get Rich

The Shame of Starting Late, and How to Combat It

You're saving something. You're putting it away. You're building wealth, although fairly slowly. You're carrying around a lot of debt. Not really paying it off, just kind of living with it. Then at a certain point, something happened. Something caused you to undergo a financial awakening. What was it?

“We should go back a little bit before we talk about the awakening, because I did all the typical lifestyle inflation things of a physician. As I came out of residency, there were the new cars, there was the house right away. We got into this inflated lifestyle that just kind of grew. We took the trips. We had all the experiences. I would like to say there was one advantage to being a late starter. A big one is that you're not delaying gratification in the sense that you're having experiences with your kids while they're growing up. You're not necessarily being frugal about it, but I think our kids would have good memories of that.

The problem was, it spoiled them to the point of they saw what we did, and then the awakening was an awakening for them, too. It was a shock. It came about 20 years into my career. I was 50. I just kind of woke up one day and said, ‘Wait a minute. Nobody's taking care of me but me. How am I going to get there?' We had a certain amount of savings. I think we had roughly around $1 million, but that's after 20 years of working. The problem I reached was there was a bad crossover between burnout and the ability to work longer. I did not reach a transition point. The wakeup was quite a shock. It sent me into a bit of a depression.”

You're feeling down maybe about what you'd done in the past. Did that motivate you or did that paralyze you?

“Both. Absolutely both. I initially was paralyzed for a time, but then I quickly went down the rabbit hole. I think the first book I read was William Bernstein's The Intelligent Asset Allocator.”

Wow. That's a tough one for a first book.

“Yeah. It was. I started out tough. I said to myself, quite interestingly, ‘I wish somebody did this for physicians.' This was back in 2016. Quickly after going down the rabbit hole, I stumbled across your book and learned you had already done all this work. It was amazing how much information was out there that I hadn't even acknowledged. I'd had my head in the sand for 20 years. I just didn't think it was important.

I think this is probably a pretty common approach for physicians. It seems like, at least in what I've looked at, about 40% of folks start after 40. It's a majority of people in some level where we're silent. We're just not aware, and then we end up in a recursive cycle of shame and paralysis and the feeling like it's overwhelming and we can't do this.”

When the student is ready, the teacher will appear, right? It's amazing how much information is out there once you start looking for it. Let's talk a little bit about that shame, because I agree with you. I think that's really common. I had an email today, and this isn't from somebody that's at mid-career. This was someone that was just starting out and had a whole bunch of student loans and a bunch of credit card debt and some car loans. She mentioned being embarrassed by the debt. I think this is very common. Why do you think doctors feel that shame when they maybe haven't perfectly optimized their finances?

“Well, we're smart folks. We've done everything right to take care of learning how to take care of somebody else's health. We haven't had the family background and money. We haven't had any formal education, whether it be college or med school especially. Then you come out of it and you just get about life. As far as shame goes, debt leads to isolation. That's the biggest enemy of recovering your finances. You feel like you're alone. You feel like you're the only one that has done this. You don't feel like you're part of a community of people that have had this problem, and you don't talk about it. The way out of it is to talk about it, reach out to people, ask for mentors and help. I didn't do that.”

Yeah, for sure. Lots of people do start late. I was talking to somebody at the WCICON conference a couple of weeks ago that had attended the year before, and we'd talked then about putting a plan in place. She came back a year later $100,000 richer and was clearly making progress. But this was someone that was already maybe just past mid-career and probably nowhere near where you were when you had your awakening at 50. She was just really getting started.

There are certainly a lot of people out there. What do you think we can do to help them to feel a little bit less ashamed? Or is that not necessarily a bad thing? Is that good? Is that shame motivating, do you think?

“Shame and anxiety are motivating to a point, but then it becomes dysfunctional and you get lost in the past. You get lost in your past mistakes. You feel like they're irrecoverable, but it's absolutely not. Once you embrace the mindset of taking care of yourself financially, just like taking care of yourself physically, it's really no different. There's all kinds of health. Once you embrace that mindset and you set about doing it, it's amazing how fast the progress can be. It's amazing how much there's sort of a saving snowball. We talk about the debt snowball, but there's a savings snowball too. Getting started is the hardest part.”

More information here:

It’s Never Too Late to Start Saving for Retirement

The Biggest Financial Mistakes

Isn't that the truth? Let's talk about this process that you went through. You mentioned that you picked up Bernstein's book and you read The White Coat Investor. What did you do to become financially literate?

“I read the books. I'm a big book person. I listened to tons of podcasts, and I followed a lot of blogs. The problem for us was we had dug a hole for ourselves with regards to doing things like hiring insurance salesmen, working with a private bank as an advisor. That was catastrophic for us. I should divulge our biggest mistake. It happened in the Great Recession. It was a cacophony of compounding events where we renovated our house to the T. We thought we were in our forever home. Quickly after we renovated it, we were upside down. Our savings rate was low, and we de-risked our portfolio. We sold stocks. We committed the cardinal sin, and all of these things happened at the same time. While the bull market was occurring, our savings rate was low and we were house poor. It was awful. That's the one that I regret the most. That's the kind of mistake I want to see people avoid.”

Let's talk about each of those. The first one, it sounds like you mistook an insurance agent for a financial advisor. Tell us a little bit more about that.

“We were sold that in residency. A lot of folks in my generation were. They had a financial advisor come and give us a lecture as part of grand rounds. Quickly thereafter, I had a whole life policy from one of those unscrupulous providers. We thought that he was a financial advisor, but in reality, we just succumbed to a sales pitch. That went on for a long time. This whole life policy, we realized its inadequacies and later turned to term life insurance. But when we cashed out our whole life policy, we used it to pay off some shortage in renovating our house. It didn't roll into any kind of savings. At every turn, we made a mistake.”

You mentioned a private banking relationship that turned out catastrophic. What happened there?

“We thought that we were smart in having our money managed by this private bank and an advisor there. They allowed us at the Great Recession to sell equities and de-risk. They did not educate us. They had an advisor fee around 1%. We had no idea that fees were so important to your financial health and that you get what you don't pay for. We paid for a lot of nothing.”

It sounds like you paid more than a fair price for bad advice. They told you to sell out at market bottom, which is supposed to be the whole point of an advisor, is to keep you from doing anything dumb in those handful of critical moments during your investing career where you can really tank your portfolio. Their job is to keep you from doing that. It sounds like they actually encouraged you to do that.

“We asked them to do it. They just didn't discourage us at all. There was absolutely no education. They weren't coaching us to any kind of financial literacy or independence.”

Then what about the house renovation? Did you feel particularly flush because the value of the home had gone up in the pre-global financial crisis boom that you felt like you had money you could use to renovate it? What led to that?

“Money was cheap and there was the boom and it started out as a paint job and it turned into a whole home renovation. Our family was growing. We needed to create a little bit more space. This is often the case. We did everything and anything to the house without any regard to the financial impact of it. We were locked in. I think we were in the house another seven years while the market recovered; then we were able to get out of it with a reasonable amount of equity. We were in Chicago at the time in a high-cost-of-living area, and we made the decision to, at the time, we didn't know it was geo-arbitrage, but we moved to Tennessee, which was a great thing for our finances.”

It sounds like you at least got into a cheaper house and had lower taxes. Did the job pay more in Tennessee?

“Absolutely. We increased our income, but we hadn't completely woken up at that point. I think this was around 2013, and the wakeup call was in 2016. We made a mistake at this point, too. We built a house. We didn't downsize at that point. The physical downsize occurred shortly after 2016 when we realized that we needed to deflate all of this inflation. And deflation from an inflated lifestyle, I would like to tell people, is one of the hardest things we've done with our finances.”

Deflating an Inflated Lifestyle

Take us back to 2016. Maybe you've read a book at this point, and you sit down with your partner and loved ones and you have a conversation. Tell us about that conversation.

“I said we were not going to be able to retire. We may never be able to retire. My father had worked until he was 80. It just seemed like the thing to do. But all of a sudden, having become part of this community, I realized that people were retiring. It felt very lonely because you're surrounded by people that have done it right and you're not surrounded by people that have done it wrong. Like I said, it felt very lonely and the conversation really went along the lines that we need to make some drastic changes, which we did.”

Was there any pushback? Did your partner push back and say, “I like the life we have. Why can't we keep doing what we're doing? We're millionaires. We've got a million dollars in retirement savings.” Was there any sort of pushback, or were you both kind of immediately onto the same page?

“Quickly we were on the same page. My wife turned the CFO role over to me, but she quickly embraced it, too. She realized what was going on and did not push back. There was probably pushback from our kids a little bit, actually.”

Tell us about that. What do you think was the biggest change in their lives?

“We have twins, which was overwhelming in and of itself. One of the financial things that happened to us is one of our twins had significant developmental issues. That took a concerted amount of effort and finance to recover, which fortunately turned out really well. But that was another distractor from taking control of our finances. There seemed to always be another distractor. You could always kick the can down the road and say, ‘We can take care of this someday.'

As far as to answer your question, one of our kids turned out a spendthrift, unfortunately. I think we modeled entirely wrong. The other one, I don't know if it's genetic or what, he's frugal naturally. He doesn't need for much, and he's good with his money. I think he's watched our recovery and embraced it. The other one hasn't so much. It's hard to recover from poor modeling.”

That's interesting. And they're twins, you said. Same age and essentially the same environment throughout their upbringing. Everybody who has kids knows this, but every kid is different. You have to raise every one of them a little bit different. I guess that applies to twins, as well. That's interesting, though.

You had a bunch of stuff you had to change. You had to get rid of the whole life policy. You had to get rid of the advisor. What order did you tackle these in and which ones did you find relatively easy and which ones did you find relatively difficult to do?

“I had never even tracked net worth. I probably didn't know what it was. The first thing I did was assess our liabilities and assets and figure out what our net worth really was. I was happy to see that it wasn't nothing. I've had friends that started at 50 with zero and retired at 63 after concerted efforts over 13 years. Not physicians per se but other people in the space. I took the money out of the private bank, put it into Fidelity and Vanguard. I quickly invested in low-cost passive index funds and created a portfolio that I thought I could stick with and ascribed to your “150 Portfolios Better Than Yours” philosophy of, as long as I was happy with it and I just stuck with it, I'd be fine. And that's been the case.”

Was any of that hard? For a lot of people, this is really hard to start putting in their own buy and sell orders and open an account at Vanguard or Fidelity. Did you find any of that to be difficult?

“No. Once I lock into something and I changed the habit, it was very easy. My wife and I, fortunately, are both high-income professionals, and we had a big shovel to dig out of this. Our savings rate went from single digits to 40%-50% almost overnight. Which for a late saver, that's critical.”

More information here:

The Impact of Lifestyle Deflation

On the Path to Financial Independence

You start at 50, and I presume there was some sort of a plan here, some sort of a goal. Is there a retirement age or date or amount goal that you set out in front of yourselves to work toward?

“There's both: 63 to 65. Instead of working forever, we get to retire on time. Our spending habits didn't frugal down to the sort of things you can do when you're younger. I think the balanced approach of about a 40%-50% savings rate was the best for us. We couldn't squeeze any more juice out of the lemon, so to speak, which dictated how much time it was going to take.

Depending on market conditions and savings rate, the earliest we'll retire is 63, which is another six years away for me. Basically 13-15 years away from the wakeup, which I think according to the Mr. Money Mustache's shockingly simple math of early retirement is about right. That's what it is based on that savings rate. Embracing that and accepting that can be hard, too.”

For those who don't know what Bill's talking about there, Pete, aka Mr. Money Mustache, wrote a post—I don't know, it's got to be a decade ago now—called “The Shockingly Simple Math Behind Early Retirement.” The idea is that it really has little to do with anything beyond your savings rate. If you're saving some piddly amount, you never get to retire. If you're saving all your money, you're already financially independent and everything else on the chart is somewhere in between. You plot your savings rate, and that tells you how long until you're financially independent. That's what he's referring to there. I found that to be pretty darn true, as well. The more you save, the shorter your time period. In fact, I've told doctors many times that no doctor is ever really more than 10 years away from retirement. If they're willing to take that doctor's income and save most of it, you can get there pretty darn fast.

“I agree. I ascribe to your philosophy, too, of working on your debt for five years, living the life of a resident. I think as long as you are intentional and work on it for 15 years, every physician can retire by 50. It's worked out to be 20 years for the money and the rest for joy or a renaissance career.”

Yeah, absolutely. What about debt? You mentioned earlier you'd been carrying credit card debt around. Did you have a bunch of that when you got to 50? Did you still have balances on your credit cards and card loans and those sorts of things at 50?

“No. We'd gotten rid of all of that. All we had left at the wakeup call was a mortgage. We were fortunate, too. We'd gotten to the age where unfortunately a family member had passed away. While we were making concerted efforts to pay it off quickly, we got a windfall. We managed that windfall appropriately, and it helped us pay off the remainder of our mortgage. We've been debt free for four or five years, which has also enabled us to escalate our savings rate.”

What role did burnout play in this, I don't want to call it a midlife crisis, but this financial awakening? Was there an effect from how you were feeling about your career that also contributed to this?

“I was tired. It had become more of a job. I'd mastered the profession and, quite honestly, was a little bored. There weren't any new things to learn anymore. It was a matter of working the plan, working the job. Medicine has changed, as we know. It's catastrophically changed. I work in corporate emergency medicine, and in the last few years, you're seeing all your patients in the waiting room. They're expecting metrics that are unattainable in spite of short-staffing of nurses and providers in general. No beds upstairs. Incredible boarding situations in ERs. This is medicine that I had not practiced in my entire career until about the last five years.”

It is certainly contributing to your desire to at least have a date hanging out there when you're done that's not 80 years old.

“One of the things you teach everybody and I think is really important is not just to have dreams and aspirations but to have concrete goals and to create an investor policy statement. I find that to be a critical move. Once you wake up, wrap your head around things, and are able to make a pivot, you've got to get that down on paper, review it, and stick to the plan.”

Helping Those That Are Getting a Late Start

Preach on, man. Preach on. I love it. Let's shift gears a little bit. You fixed your financial life, and you could have been a lot worse. I mean, you were a millionaire, you paid off your consumer debt. Some people don't get that far. Some people are still running around with student loans at 50. You did a lot of things right. But obviously, you had some regrets and a little bit of shame until you fixed that at 50. But then you went beyond there. You didn't just fix your own finances. You had a fire lit under you and started crusading and helping others. Tell us about what you've done with Facebook groups and forums and blogging and podcasting to try to help others, particularly those that maybe have had a little bit of a late start.

“My kids got tired of hearing about finance. That led to the birth of the Financial Literacy Project. I needed a place to basically become a library of content that I found interesting and share with others. The group grew quickly to about 2,100 people. There's a lot of really smart influencers there. It's a place to share ideas, share knowledge, ask questions, get your questions answered, and realize that you're not alone in this community.

That morphed recently into another movement where I realized that my avatar was the late starter. I wanted to help others wake up earlier. People at my stage of life wake up in time, because I think after 50, you probably are getting too late. You really are. There is kind of a hard wall that you have to hit and start before then; otherwise, you're going to take a lifestyle hit. In trying to correct that, we've started the community Catching Up To FI. It's a Facebook group; it's now a podcast. My partner is in the sort of more mainstream financial literacy space. She's retired, and she had this journey. She started at zero at 50 and is now having a comfortable retirement and enjoying it. Now we're doing this and we bridge kind of not only the physician space but the other space, the Mr. Money Mustache space. It's nice to bring both populations together.”

The thing I love about bringing both populations together is it makes the doctors realize just how silly it is when they're saying “I can't live on $250,000 a year.” Because they turn around and look at somebody else in the community that's living on $40,000. They realize, “OK, this can be done. Maybe I can't have the exact same lifestyle as my partner that's never going to retire.” I think it's very helpful for docs. It really grounds them to be around the typical FIRE community and realize just how much of the spending that we think is normal as doctors is very different from the life of the average American.

“My son earns about $40,000 a year, and he saves 10% to his Roth IRA. He started at 24. I'm very proud of him. He's drunk the Kool-Aid a little bit, and he's a low-income professional, so to speak. You can do it at any income. We're privileged by being high-income professionals, but more money equals more problems. You can dig a bigger hole more quickly than other folks.”

It's amazing how much they will loan to us, right? It's pretty typical for a dentist to come out with $500,000 dollars in student loans, qualify for a $500,000 mortgage, and then take out another $500,000-$1 million in a practice loan. All of this, if that practice doesn't take off on an income of maybe just $150,000 as an associate, it's pretty amazing how much trouble you can get into just by virtue of being a high-income professional.

“Absolutely.”

You've now had a chance to live a bit of an online life. As near as I can tell, you've always been out there with your real name, your real face doing it. Have you experienced any episodes of kind of hate or pushback in your time doing that?

“Not at all, actually. Very little. I think coming out and being vulnerable breeds trust. People appreciate the honesty, especially for the late starters. It takes away the aloneness of the situation. People are generally impressed that there is a recovery story. There's money addiction just like any other addiction and you have to recover that addiction, the spending addiction. When you do that, I think people find that to be an inspirational story.”

Do you guys feel like you ever had retail therapy, that you used spending to deal with the stresses of life?

“Absolutely. Food therapy, retail therapy, travel therapy. Oddly enough, too, in our journey to move toward FI, I didn't escalate my work. I actually stepped back. I think once you get financially literate and start getting ahead of the game, in order to manage burnout, I had to weigh time to retirement with ability to work the night shifts, the weekends, the holidays. The long shifts physically take a toll at a certain point. As well as the risk you're managing, especially in today's medical environment. That's a heavy burden that weighs on your mind, as well. I've actually taken a paycut, and I'm working less. I'm fortunate that my wife was able to escalate her career at the time that I was backing off, so we haven't seen the over-under drop really. We lead a balanced partnership in that regard.”

What does your shift schedule look like now?

“I'm doing 12-hour shifts actually right now, and I do 10-12 a month. I enjoy my time off. I spend time doing it with the podcast and working out and hanging out with my dogs, traveling. Even though we're sort of locked into less autonomy than maybe other professions, when you take more time outside of work, I think it really helps you with being able to work and come back fresh.”

You're still working night shifts?

“I am. It's hard. I don't like them. If there's one thing I wish I could buy back is the night shifts. I can do everything else. The night shifts are a big component of burnout.”

For sure. That was a huge motivation for me to become financially independent. I never liked that feeling you get at 3 or 4 in the morning when your body is telling you, you should be asleep and you know you need to be at your sharpest. I always found that to be a very difficult time, and that was actually really motivating to me to save money to get to a point in my career where I didn't have to be at work at that time in the morning.

“I'm well aware that you did that. I'm jealous.”

Hopefully, you get a chance to also find that opportunity. What about your peers and colleagues? What do they think about this newfound interest in finance that you have? What does your family think about it?

“My family is very proud of me. My kids are proud of me. As far as the colleagues go, it's interesting. We don't have the water cooler conversations about money like they used to in the old days about stock tips. There's really very little conversation about it. Everybody looks at money as very personal. I started talking about it at work with scribes that I was working with and trying to encourage people, and people realized that I was on this new path and it actually got suppressed. I was told not to talk about it at work.”

Wow. From administrators or from other docs?

“From my director.”

Wow. That's interesting. Although I'm not terribly surprised. I've got a blog post coming out about an ad campaign we're planning to run for The White Coat Investor. Some of the ads we're going to run, these were going to run in hospitals on some of those advertising screens you see in hospitals. We got some pushback from the advertising company and their clients, the hospitals, about some of the phrasing we were using in the ads. Things that suggested maybe doctors have money problems, too. They didn't want to have those ads running in their hospitals. It was very interesting. This taboo out there that doctors and those in healthcare should never talk about money is still very much real and very much exists.

“Yeah. What do you think can help that disappear? It really seems like it's high time.”

I've been working at it for 12 years. I'm doing everything I can to tell people it's OK. It's actually naive to never talk about money. To think that you're the only people in the world that should never talk about it. It just sets you up to be taken advantage of. But as far as changing medical culture, as you know, that changes very slowly and slowest of all in the academic centers.

“Yes. Money is a common language. We need to speak it just like any foreign language, and we should speak it everywhere.”

Absolutely. Well, our time is growing short, but you now have the ear of 40,000-ish people that are going to listen to this podcast. What have we not talked about that you think they should know?

“I think it comes back to the investor policy statement. I just think that's a critical piece. Putting things down on paper, your goals, your dreams—both life and financial—is really refreshing. It gives you a timeline, it gives you specific milestones. It's nice to watch your wealth grow according to the plan you laid out. I don't think I could have done this without one.”

That's a great tip. Where can they find out more about you and what you're doing to promote financial literacy?

“We've developed a website called catchinguptofi.com. Look for us there. Reach out to us there. As I mentioned before, the Facebook groups Catching Up To FI and the Financial Literacy Project. Our podcast is in its infancy. We have five episodes out. It's been warmly received and it's been a lot of fun.”

Thanks so much, Bill, for what you do, both at the day gig as well as the side gig. It's making a big difference, and we appreciate you.

“Well, thank you, Jim. Thanks for having me on.”

I hope you enjoyed that interview as much as I did. Bill is a great person. His heart is in the right place, and he has helped a lot of people out there.

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This is an announcement specifically for women who do not yet have disability insurance in place. Women are better off buying unisex policies if you can. Disability insurance is more expensive for women because they're more likely to get disabled. It's just the opposite of life insurance where men pay more for their life insurance. Women pay more for their disability insurance. But those unisex policies are starting to disappear. They are harder and harder and harder to get. As of right now, when this podcast is dropping on March 30, they're still available with Ameritas and Principal in those three states: Ohio, Massachusetts, and Montana. But that's going away very quickly. As of April 1, it's going away for Ameritas. As of May 1, it's going away for Principal. You're going to have fewer options for these unisex policies if you are a female applicant in those three states.

If you need help buying disability insurance, the best people in the country doing this can be found at whitecoatinvestor.com/insurance. These are all independent agents that can sell you a policy from any of the big five companies, and they will walk you through the process. They understand that not everybody they talk to is going to buy a policy from them, but they will educate you and help you to buy the right policy for you.

Continuing Financial Education 2023 Course Sale

Save $100 on this year's amazing CFE Course. The sale runs April 4-17, 2023. This course is put together every year with all of the amazing content from WCICON. It qualifies for CME, and it's packed full of incredible information to aid you in your journey toward financial literacy and independence. It has fantastic lectures and courses to help reduce burnout, create a better work/life balance, and help create overall wellness in your life. Check it out today at wcicourses.com/continuting-financial-education-2023.

Milestone to Millionaire

#111 – Internal Medicine Doc Becomes a Millionaire

This internal medicine doc has become a millionaire not long out of training. He has lived like a resident and saved a huge portion of his income. This doc has done a little bit of everything from saving cash, investing in the stock market, and starting his real estate empire. He is passionate about creating low-income housing and helping to better the community he grew up in. His advice to you is to make a commitment to building wealth. He says to have a solid mindset, to have a strong work ethic, and to start young so your wealth can grow exponentially.

Listen to Episode #111 here.

Sponsor: All Global Circle

Full Transcript

Transcription – WCI – 308

Intro:
This is the White Coat Investor podcast, where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high-income professionals stop doing dumb things with their money since 2011.

Dr. Jim Dahle:
This is White Coat Investor podcast number 308 – Overcoming a late start.

Dr. Jim Dahle:
Right now, qualifying medical professionals can refinance their private student loans with an up to 1% rate discount. Still a resident? With SoFi Student Loan Refinancing, you could pay just $100 a month during your residency.

Dr. Jim Dahle:
As a SoFi member, you'll have access to a powerful set of tools, education, even financial planners, to help you not only save money, but help you get on the road to financial freedom.

Dr. Jim Dahle:
Check out the payment plans and interest rates at sofi.com/whitecoatinvestor. SoFi student loans are originated by SoFi Bank, N.A. Member FDIC. Additional terms and conditions may apply. NMLS# 696891.

Dr. Jim Dahle:
All right. Welcome back to the podcast everybody. I've got a few announcements and things I want to talk about before we get into our interview today. It's okay. It's a little bit shorter interview than usual. So I feel like I've got some time to add some additional information here.

Dr. Jim Dahle:
The first is, for those of you who are women practicing in Ohio, Massachusetts, or Montana, if you do not have disability insurance in place, you should. But if you don't yet, here's a reminder. Get some disability insurance in place.

Dr. Jim Dahle:
For women, you are better off buying unisex policies if you can because disability insurance is more expensive for women because they're more likely to get disabled. It's just the opposite of life insurance where men pay more for their life insurance, women pay more for their disability insurance.

Dr. Jim Dahle:
But those unisex policies are starting to disappear. They are harder and harder and harder to get. And as of right now, when this podcast is dropping on March 30th, they're still available with Ameritas and Principal in those three states. But that's going away very quickly. In fact, as of April 1st, it's going away for Ameritas. And as of May 1st, it's going away for Principal. So you're going to have fewer options for these unisex policies if you are a female applicant in those three states. So be aware of that.

Dr. Jim Dahle:
If you need help buying disability insurance, by the way, the best people in the country doing this can be found at whitecoatinvestor.com/insurance. These are all independent agents that can sell you a policy from any of the big five companies, will walk you through the process.

Dr. Jim Dahle:
None of them are desperate for money. They understand that not everybody they talk to is going to buy a policy from them, but they will educate you and help you to buy the right policy for you, which varies, right? It might be a different company for you than it is for your friend that lives across the country or somebody of a different gender, even in your same state or a different specialty. So you need the policy that's right for you. The best way to get it is an independent insurance agent.

Dr. Jim Dahle:
All right. We need to talk a little bit about a correction. And this came in via email from somebody who actually had something nice to say about me. She said, “Thanks for all you do and your down-to-earth attitude. I've been able to have the fortune of meeting you in person twice in the past several years, and you're just as lovely on the air as you are in person.” I thought that was really nice.

Dr. Jim Dahle:
But the correction she gave me, which I thought was really good, I had said on episode 284, it's been a while, granted. That it was pretty rare actually for doctors to have big out-of-pocket expenses for healthcare as tax deductions. Because remember, there's a floor on your tax deductions for healthcare expenses. It's 7.5% of your income on Schedule A. There's that floor there. If you don't spend at least 7.5% of your income on healthcare, you can't deduct it.

Dr. Jim Dahle:
But there is one category where doctors routinely spend more than 7.5% of their income on healthcare, and that's IVF. So, that is definitely an exception to that general rule I put out there, and I appreciate that correction. It's not unusual at all for people to spend $20,000 or $30,000 or $40,000 in a single year for healthcare. And especially if you're doing that in residency or in fellowship when your income's a little bit lower, that can easily be more than 7.5% of your income. And that becomes deductible to you on Schedule A, assuming you're itemizing, which you may not be as a resident or a fellow.

Dr. Jim Dahle:
She also mentioned that as a palliative care doctor, she worries that a lot of White Coat Investors are optimizing rather than balancing their lives, that they're optimizing for future wealth and wanting to remind people that we need to be careful with our usual obsessive-compulsive tendencies to maximize everything and don't forget to live as we go along. Because there are plenty of patients in the 30s, 40s, 50s, etc, to get diagnosed with not necessarily a terminal illness, but may just be a life-limiting illness. So, find a balance in your life. I thought that was a great correction.

Dr. Jim Dahle:
All right. Well, it is March 13th. This is going to drop for you on March 30th, but as I'm recording this, there's lots of interesting things happening. We just came back from WCICON. It was awesome. Definitely should have been there. If you weren't there, you really missed out. And there's a few options if you missed out, don't worry. Let me tell you a little bit about it.

Dr. Jim Dahle:
My favorite part of any conference is just meeting the people. I love hearing about your successes. I love hearing about your challenges. It drives content when I talk to you individually. In fact, this last week, I think I wrote 12 blog posts. I just get inspired when I talk to you about what you're doing in your lives and it makes me write. And so, I love that part of it.

Dr. Jim Dahle:
We had a hero at the conference and it was pretty awesome. I want to out her right here on the podcast. I think she actually was on the blog. You can read about it in Josh Katzowitz's blog post a couple of weeks ago that he ran after the conference.

Dr. Jim Dahle:
But basically at a dinner, on the last evening of the conference, there was a doc choking. And she jumped up, saved his life. Gave him the Heimlich maneuver like we all learn in BLS. And sure enough, it worked. And obviously, she said what all heroes say, “Anybody would've done the same thing.” That's not always the case. But I was super happy that the next day continued to be a celebration of wellness rather than an event of mourning. That would've been terrible if someone had passed away at the conference.

Dr. Jim Dahle:
So, I was super grateful to her. And she's actually coming on our dime to the next WCICON. That one, by the way, is in Orlando, so save the dates. You can't sign up for it right now. Although we did allow people who came to this year's conference to buy it there. 117 of them are coming back. That's how much they love this year's conference. But the next one is February 5th through 8th, 2024. You'll be able to apply to speak for that if you're interested in being a speaker in June. You can register to come to it at some point in September, I think we're going to open registration.

Dr. Jim Dahle:
But it's going to be in Orlando. We're going to try the East Coast this time. And hopefully still just have awesome weather, awesome winter weather down there in Orlando. Bring your family, go to Disney World the weekend before or the weekend after, and make a trip out of it. It'd be awesome to see you there.

Dr. Jim Dahle:
But if you still want to see the stuff from this year's conference, I highly recommend it. There were some awesome talks. As Josh said in his blog post, if you missed it, the one from Stacy Taniguchi was probably everybody's favorite talk at the conference. It was on choosing to thrive. And if you didn't feel like you were standing over a crevasse on a rickety old ladder, halfway through that talk, wondering what you would cross the ladder for in your life, there's something wrong with you.

Dr. Jim Dahle:
It was a pretty powerful presentation, and by itself is well worth the cost of admission to our Continuing Financial Education 2023 course. That's the one we put together every year from WCICON. And it's not on sale today, but it will be on sale April 4th through 17th at a sale price of $699. The normal price is $789, so that's a discount if you buy it before April 17th.

Dr. Jim Dahle:
It's going to qualify for CME credits. So you can use your CME money to use it. If you're self-employed, you can write it off as a business expense. It may be as many as 22 credits that's still under review, but I'm sure it'll be at least 15 or 18 credits, which is usually plenty to get it to qualify with whoever approves that stuff for you. So, it gives you all the latest in physician wellness and financial literacy.

Dr. Jim Dahle:
So, watch for that. There'll be announcements on the blog. There'll be a prominent link at the website if you want to purchase that. You can also just go to whitecoatinvestor.com/cfe2023 and buy that.

Dr. Jim Dahle:
All right. There's a lot of current events going on right now. This is Monday after Silicon Valley Bank failed on Friday. And I hate talking about current events, especially when you're not going to hear this for a couple of weeks, because everything's going to change between now and then. But I think there's a few lessons that we can take from this even now.

Dr. Jim Dahle:
Number one is that the Fed's stepping in and backing the deposits. And this is kind of a new thing for the Fed. You remember the bailouts of 2008, or maybe you don't, but there were bailouts in 2008 where the government stepped in and kept these banks as going businesses. They were basically thought to be too big to fail. And that's not necessarily the case. For smaller banks, they let them fail. But some of the ones that were in trouble in 2008, they didn't let them fail. They stepped in.

Dr. Jim Dahle:
But they've kind of signaled they're doing something different this time. They're backing the depositors, but not the banks, which is kind of new and interesting. Great for you if you're a depositor, not so great for you if you're a bank stockholder. I had a friend send me a text this morning that First Republic Bank is down 65%, the value of their shares. I guess there's a lot of people worried they're going to be next after Silicon Valley. I guess two weeks from now you'll know if that's true or not.

Dr. Jim Dahle:
But it makes you wonder if maybe a lot of those regional banks, their shares maybe aren't worth as much as people thought they were when maybe they thought the government would step in and actually save the business. But it seems like the signals we're getting from the government are that they feel bad for the depositors, not the people running the bank. So, it's an interesting development, let's keep an eye on it.

Dr. Jim Dahle:
Another lesson you can learn from that is that FDIC limits matter. You're only supposed to have $250,000 in a bank. If you have more than that, you need to put it under your spouse's name or under a joint name to get a little bit more coverage than that, or start putting it in another bank.

Dr. Jim Dahle:
And that's not usually a case for most individuals, but it can be the case for your business. If you've got a successful business that has more cash than that, you might want to consider splitting it between multiple banks. Even these businesses that have $300 million. They're not going to put $250,000 in every single bank in the country, right?

Dr. Jim Dahle:
But there is some benefit to having money in two or three banks rather than all of it in one bank. A lot of people are very worried this week about making payroll, not because their business isn't successful, but because Silicon Valley Banks' business isn't successful and you don't want to be in that situation. So, some good lessons to take from that.

Dr. Jim Dahle:
All right. Our interview today is with Bill Yount, who you probably know from the Financial Literacy Project or perhaps his new podcast. He just started a new podcast. But he's going to be talking to us a lot today about some of the issues faced by those who get a late start on their finances, or at least feel like they've got a late start, and what they can do to change that and to overcome that inertia and maybe dial back their lifestyle a little bit and talk about some of those issues. So, let's get Bill on the line. Let's do this interview.

Dr. Jim Dahle:
I'm here with emergency physician Bill Yount, who you probably know from a lot of his financial literacy work that he has done all over the internet. Welcome to White Coat Investor podcast, Bill.

Dr. Bill Yount:
Thanks, Jim. Thanks for having me.

Dr. Jim Dahle:
Our subject today is going to be talking about getting a late start. But I don't want to start with that. Let's go back to the beginning and I want to start with your upbringing and particularly what it taught you about money.

Dr. Bill Yount:
Well, I grew up in a middle-class family. My father was a state-employed physician, and my mother was a nurse that went into the home after they got married and had kids. So, we didn't want for anything, but we lived in a scarcity mindset. My father was sort of fear-based, frugal to a point where his kids didn't think that there was much money, and we didn't talk about it at all. It was taboo. There were fights about it. We didn't learn a thing about it. There was no advice. And we were left to fend for ourselves.

Dr. Jim Dahle:
When you left home, your assumption is there was no help coming from home?

Dr. Bill Yount:
No. There was none. Absolutely none. I went away to boarding school, came back home for med school, and went away then again to Chicago for residency. And throughout that, I just lived paycheck to paycheck and I didn't learn how to partition anything. And I exited residency with no idea what to do with my money other than spend it.

Dr. Jim Dahle:
Okay. So that takes us through your education and training. At this point, you're coming out of residency. You are an attending emergency physician. You're making pretty good money. You really don't have a lot of financial literacy. Tell us about your financial life for the next 10 to 20 years.

Dr. Bill Yount:
Well, the best financial decision I made was to go to my state school. The tuition at that time back in the 90s was $500 a semester. It was unbelievable. I didn't have the problem of student loan debt whatsoever. The cost of a medical education was the cost of living at my state school. The only debt I had coming out of residency was consumer debt. I deserved a lot of things during residency because I was working so hard, and I think I had about $30,000 of credit card debt as I exited residency.

Dr. Jim Dahle:
And what'd you think about that? Did you have any sort of plan for that credit card debt? Do you feel like that was pretty normal?

Dr. Bill Yount:
No. I felt like it was normal. I think Cory Fawcett talks about Debtabetic Neuropathy. I definitely had that. Debt was a part of life. It was something you did. I paid the minimums. I used zero-balance credit cards to roll to balances. I did a lot of things that I think the general population does.

Dr. Jim Dahle:
Okay. At this point, you work for an employer that offered a retirement plan or anything like that. Did you have any thought about retirement or saving for the future?

Dr. Bill Yount:
I did a little bit. I knew I needed to save, and they did have a retirement plan. I'm not sure what it was at that point, whether it was a SEP IRA that I had or a 401(k). I think we were at that point, sadly, I would like to say single-digit savers, no more than 10%.

Dr. Jim Dahle:
So you're saving something. You're putting it away. All right. And so, you're building wealth, although fairly slowly. You're carrying around a lot of debt. Not really paying it off, just kind of living with it. And then at a certain point, something happened. Something caused you to undergo a financial awakening. What was it?

Dr. Bill Yount:
Yeah. We should go back a little bit before we talk about the awakening because I did all the typical lifestyle inflation things of a physician. As I came out of residency, there were the new cars, there was the house right away. And we got into this inflated lifestyle that just kind of grew. We took the trips. We had all the experiences.

Dr. Bill Yount:
I would like to say there was one advantage to being a late starter. A big one is that you're not delaying gratification in the sense that you're having experience with your kids while they're growing up you're not necessarily being frugal about it. But I think our kids would have good memories of that.

Dr. Bill Yount:
The problem was, it kind of spoiled them to the point of they saw what we did, and then the awakening was an awakening for them too. It was a shock. It came about 20 years into my career. I was 50. I just kind of woke up one day and said, “Wait a minute. Nobody's taking care of me but me. How am I going to get there?” We had a certain amount of savings. I think we had roughly around a million dollars, but that's after 20 years of working.

Dr. Bill Yount:
And the problem I reached was there was a bad crossover between burnout and the ability to work longer. I did not reach a transition point. So, the wake-up was quite a shock. It sent me into a bit of a depression.

Dr. Jim Dahle:
And so, you're feeling down maybe about what you'd done in the past. Did that motivate you or did that paralyze you?

Dr. Bill Yount:
Both. Absolutely both. I initially was paralyzed for a time, but then I quickly went down the rabbit hole. I think the first book I read was William Bernstein's, the Intelligent Asset Allocator.

Dr. Jim Dahle:
Wow. That's a tough one for a first book.

Dr. Bill Yount:
Yeah. It was. And so I started out tough. And I said to myself, quite interestingly, “I wish somebody did this for physicians.” And this was back in 2016. And quickly after going down the rabbit hole, I stumbled across your book that was out there, and you had already done all this work. It was amazing how much information was out there that I hadn't even acknowledged. I'd had my head in the sand for 20 years. I just didn't think it was important.

Dr. Bill Yount:
I think this is probably a pretty common approach for physicians. It seems like, at least in what I've looked at, about 40% of folks start after 40. It's a majority of people in some level where we're silent. We're just not aware, and then we end up in a recursive cycle of shame and paralysis and the feeling like it's overwhelming and we can't do this.

Dr. Jim Dahle:
And when the student is ready, the teacher will appear, right? It's amazing how much information is out there once you start looking for it. Let's talk a little bit about that shame, because I agree with you. I think that's really common.

Dr. Jim Dahle:
I had an email today, and this isn't from somebody that's at mid-career. This was someone that was just starting out and had a whole bunch of student loans and a bunch of credit card debt and some car loans. And she mentioned being embarrassed by the debt. I think this is very common. Why do you think doctors feel that shame when they maybe haven't perfectly optimized their finances?

Dr. Bill Yount:
Well, we're smart folks. We've done everything right to take care of learning how to take care of somebody else's health. We haven't had the family background and money. We haven't had any formal education, whether it be college, med school especially. And then you come out of it and you just get about life.

Dr. Bill Yount:
As far as shame goes, debt leads to isolation. And that's the biggest enemy of recovering your finances. You feel like you're alone. You feel like you're the only one that has done this. You don't feel like you're part of a community of people that have had this problem, and you don't talk about it. The way out of it is to talk about it, reach out to people, ask for mentors and help. And I didn't do that.

Dr. Jim Dahle:
Yeah, for sure. And lots of people do start late. I was talking to somebody at the WCICON conference a couple of weeks ago that had attended the year before, and we'd talked then about putting a plan in place. And she came back a year later $100,000 richer, and was clearly making progress. But this was someone that was already maybe just past mid-career and probably nowhere near where you were when you had your awakening at 50. Still just really getting started.

Dr. Jim Dahle:
So, there's certainly a lot of people out there. What do you think we can do to help them to feel a little bit less ashamed? Or is that not necessarily a bad thing? Is that good? Is that shame motivating, do you think?

Dr. Bill Yount:
Yeah. Shame and anxiety are motivating to a point, but then it becomes dysfunctional and you get lost in the past. You get lost in your past mistakes. You feel like they're irrecoverable, but it's absolutely not. And once you embrace the mindset of taking care of yourself financially, just like taking care of yourself physically, it's really no different. There's all kinds of health.

Dr. Bill Yount:
And once you embrace that mindset and you set about doing it, it's amazing how fast the progress can be. And it's amazing how much there's sort of a saving snowball. We talk about the debt snowball, but it really snowballs from when you just start. Getting started is the hardest part.

Dr. Jim Dahle:
Yeah. Isn't that the truth? So, let's talk about this process that you went through. You mentioned that you picked up Bernstein's book and you read the White Coat Investor. What did you do? Once you decided I'm going to do something, what did you actually do to become financially literate?

Dr. Bill Yount:
I read the books. I'm a big book person. I listened to tons of podcasts and I followed a lot of blogs. The problem for us was we had dug a hole for ourselves with regards to doing things like hiring insurance salesman, working with a private bank as an advisor. That was catastrophic for us.

Dr. Bill Yount:
I should divulge our biggest mistake. It happened in the Great Recession. It was a cacophony of compounding events where we renovated our house to the T. We thought we are in our forever home.

Dr. Bill Yount:
Quickly after we renovated it, we were upside down. Our savings rate was low, and we de-risked our portfolio. We sold stocks. We committed the cardinal sin, and all of these things happened at the same time. And while the bull market was occurring, our savings rate was low and we were house poor. It was awful. That's the one that I regret the most. And that's the kind of mistake I want to see people avoid.

Dr. Jim Dahle:
Let's talk about each of those. The first one, it sounds like you mistook an insurance agent for a financial advisor. Tell us a little bit more about that.

Dr. Bill Yount:
Well, we were sold that in residency. A lot of folks in my generation were. They had a financial advisor come and give us a lecture as part of grand rounds. And quickly thereafter, I had a whole life policy from one of those scrupulous providers. And we thought that he was a financial advisor, but in reality, we just succumbed to a sales pitch.

Dr. Bill Yount:
And that went on for a long time. This whole life policy, we realized its inadequacies and later, turned to term life insurance. But when we cashed out our whole life policy, we used it to pay off some shortage in renovating our house. It didn't roll into any kind of savings. At every turn, we made a mistake.

Dr. Jim Dahle:
You mentioned a private banking relationship that turned out catastrophic. What happened there?

Dr. Bill Yount:
Well, we thought that we were smart in having our money managed by this private bank and an advisor there. They allowed us at the Great Recession to sell equities and de-risk. They did not educate us. They had an advisor fee around 1%. We had no idea that fees were so important to your financial health and that you get what you don't pay for. And we paid for a lot of nothing.

Dr. Jim Dahle:
Well, it sounds like you paid more than a fair price for bad advice. They told you to sell out at market bottom, which is supposed to be the whole point of an advisor, is to keep you from doing anything dumb in those handful of critical moments during your investing career where you can really tank your portfolio. Their job is to keep you from doing that. And it sounds like they actually encouraged you to do that.

Dr. Bill Yount:
We asked them to do it. They just didn't discourage us at all. There was absolutely no education. They weren't coaching us to any kind of financial literacy or independence.

Dr. Jim Dahle:
And then what about the house renovation? Did you feel particularly flush because the value of the home had gone up in the pre-global financial crisis boom that you felt like you had money you could use to renovate it or what led to that?

Dr. Bill Yount:
Well, money was cheap and there was the boom and it started out as a paint job and it turned into a whole home renovation. Our family was growing. We needed to create a little bit more space. This is often the case. And we did everything and anything to the house without any regard to the financial impact of it. And we were locked in.

Dr. Bill Yount:
I think we were in the house another seven years while the market recovered, and we were able to get out of it with a reasonable amount of equity. And we were in Chicago at the time in a high-cost of living area, and we made the decision to, at the time, we didn't know it was geo arbitrage, but we moved to Tennessee, which was a great thing for our finances.

Dr. Jim Dahle:
At least got into a cheaper house, lower taxes. Did the job pay more in Tennessee?

Dr. Bill Yount:
Absolutely. We increased our income and we hadn't completely woken up at that point. I think this was around 2013 and the wake-up call was in 2016. We made a mistake at this point too. We built a house. So, we didn't downsize at that point. The physical downsize occurred shortly after 2016 when we realized that we needed to deflate all of this inflation. And deflation from an inflated lifestyle, I would like to tell people, is one of the hardest things we've done with our finances.

Dr. Jim Dahle:
So, take us back to 2016. Maybe you've read a book at this point, and you sit down with your partner and loved ones and you have a conversation. Tell us about that conversation.

Dr. Bill Yount:
We're not going to be able to retire. We may never be able to retire. My father had worked until he was 80. It just seemed like the thing to do. But all of a sudden, having become part of this community, I realized that people were retiring. It felt very lonely because you're surrounded by people that have done it right and you're not surrounded by people that have done it wrong. So, like I said, it felt very lonely and the conversation really went along the lines that we need to make some drastic changes, which we did.

Dr. Jim Dahle:
Was there any pushback? Did your partner pushback and say, “I like the life we have. Why can't we keep doing what we're doing? We're millionaires. We've got a million dollars in retirement savings.” Was there any sort of pushback or were you both kind of immediately onto the same page?

Dr. Bill Yount:
Yeah, quickly we were. My wife turned the CFO role over to me, but she quickly embraced it too. She realized what was going on and did not push back. There was probably pushback from our kids a little bit, actually.

Dr. Jim Dahle:
Tell us about that. What do you think was the biggest change in their lives?

Dr. Bill Yount:
Well, we had twins, which was overwhelming in and of itself. And one of the financial things that happened to us was all these unexpected events. One of our twins had significant developmental issues. So that took a concerted amount of effort and finance to recover, which fortunately turned out really well. But that was another distractor from taking control of our finances. There seemed to always be another distractor. You could always kick the can down the road and say “We can take care of this someday.”

Dr. Bill Yount:
As far as to answer your question, one of our kids turned out a spendthrift, unfortunately. I think we modelled entirely wrong. The other one, I don't know if it's genetic or what, he's frugal naturally. He doesn't need for much and he's good with his money. I think he's watched our recovery and embraced it. The other one hasn't so much. It's hard to recover poor modelling.

Dr. Jim Dahle:
That's interesting. And they're twins, you said. So, same age and essentially the same environment throughout their upbringing.

Dr. Bill Yount:
Yes.

Dr. Jim Dahle:
And everybody who has kids knows this, but every kid is different. You got to raise every one of them a little bit different. And I guess that applies to twins as well. That's interesting though. All right. You had a bunch of stuff you had to change. You had to get rid of the whole life policy. You had to get rid of the advisor. What order did you tackle these in and which ones did you find relatively easy and which ones did you find relatively difficult to do?

Dr. Bill Yount:
Well, I had never even tracked net worth. I probably didn't know what it was. The first thing I did was sort of assess our liabilities and assets and figure out what our net worth really was. I was happy to see that it wasn't nothing. I've had friends that started at 50 with zero and retired at 63 after concerted efforts over 13 years. Not physicians per se, but other people in the space. Actually my co-host in our podcast that we just started recently for this population.

Dr. Bill Yount:
But I took the money out of the private bank, put it into Fidelity and Vanguard. Quickly invested in low-cost passive index funds. Created a portfolio that I thought I could stick with and ascribed to your 150 portfolios better than yours, philosophy of, as long as I was happy with it and I just stuck with it, I'd be fine. And that's been the case.

Dr. Jim Dahle:
Was any of that hard? For a lot of people this is really hard to start putting in their own buy and sell orders and open an account at Vanguard or Fidelity. Did you find any of that to be difficult?

Dr. Bill Yount:
No. Once I lock into something and I changed the habit, it was very easy. My wife and I, fortunately, are both high-income professionals and we had a big shovel to dig out of this. Our savings rate went from single digits to 40% to 50% almost overnight. Which for a late saver, that's critical.

Dr. Jim Dahle:
Yeah. So, you start at 50 and I presume there was some sort of a plan here, some sort of a goal. Is there a retirement age or date or amount goal that you set out in front of yourselves to work toward?

Dr. Bill Yount:
There's both. 63 to 65. So, instead of working forever, we get to retire on time. Our spending habits didn't frugal down to sort of the things you can do when you're younger. I think the balanced approach of about a 40% to 50% savings rate was the best for us. We couldn't squeeze any more juice out of the lemon so to speak, which dictated how much time it was going to take.

Dr. Bill Yount:
And depending on market conditions, savings rate, the earliest we'll retire is 63, which is another six years away from me. Basically 13 to 15 years away from the wake-up, which I think according to the Mr. Money Mustache, shockingly simple math of early retirement is about right. That's what it is based on that savings rate. And embracing that and accepting that can be hard too.

Dr. Jim Dahle:
Yeah. For those who don't know what Bill's talking about there, Pete, AKA, Mr. Money Mustache wrote a post, I don't know, it's got to be a decade ago now called “The Shockingly Simple Math Behind Early Retirement.”

Dr. Jim Dahle:
And the idea is that it really has little to do with anything beyond your savings rate. And if you're saving some piddly amount, you never get to retire. If you're saving all your money, you're already financially independent and everything else on the chart is somewhere in between. You plot your savings rate and that tells you how long until you're financially independent. That's what he's referring to there.

Dr. Jim Dahle:
And I found that to be pretty darn true as well. The more you save, the shorter your time period. In fact, I've told doctors many times that no doctor is ever really more than 10 years away from retirement. If they're willing to take that doctor income and save most of it, you can get there pretty darn fast.

Dr. Bill Yount:
I agree. I ascribe to your philosophy too, of kind of working on your debt for five years, living the life of a resident. And I think as long as you are intentional and work on it for 15 years, every physician can retire by 50. It's sort of worked 20 years for the money and the rest for joy or a renaissance career.

Dr. Jim Dahle:
Yeah, absolutely. All right. What about debt? You mentioned earlier you'd been carrying credit card debt around. Did you have a bunch of that when you got to 50? Did you still have balances on your credit cards and card loans and those sorts of things at 50?

Dr. Bill Yount:
No. We'd gotten rid of all of that. All we had left at the wake-up call was a mortgage. And we were fortunate too. We'd gotten to the age where unfortunately a family member had passed away. And while we were making concerted efforts to pay it off quickly, we got a windfall. And we managed that windfall appropriately and it helped us pay off the remainder of our mortgage. We've been debt free for four or five years, which has also enabled us to escalate our savings rate.

Dr. Jim Dahle:
What role did burnout play in this, I don't want to call it a midlife crisis, but this financial awakening? Was there an effect from how you were feeling about your career that also contributed to this?

Dr. Bill Yount:
Yeah, I was tired. It had become more of a job. I'd mastered the profession and quite honestly was a little bored. There weren't any new things to learn anymore. It was a matter of working the plan, working the job. And medicine has changed as we know. It's catastrophically changed.

Dr. Bill Yount:
I work in corporate emergency medicine and in the last few years, you're seeing all your patients in the waiting room. They're expecting metrics that are unattainable in spite of short staffing of nurses and providers in general. No beds upstairs. Incredible boarding situations in ERs. This is medicine that I had not practiced in my entire career until about the last five years.

Dr. Jim Dahle:
So certainly contributing to your desire to at least have a date hanging out there when you're done that's not 80 years old.

Dr. Bill Yount:
Well, one of the things you teach everybody and I think is really important is not just to have dreams and aspirations, but concrete goals and to create an investor policy statement. I find that to be a critical move. Once you wake up, wrap your head around things, and are able to make a pivot, you've got to get that down on paper, review it, and stick to the plan.

Dr. Jim Dahle:
Preach on man. Preach on. I love it. All right. Let's shift gears a little bit. You fixed your financial life, and you could have been a lot worse. I mean, you were a millionaire, you paid off your consumer debt. Some people don't get that far. Some people are still running around with student loans at 50. So, you did a lot of things right. But obviously had some regrets and a little bit of shame until you fixed that at 50.

Dr. Jim Dahle:
But then you went beyond there. You didn't just fix your own finances. You had a fire lid under you and started crusading and helping others. Tell us about what you've done with Facebook groups and forums and blogging and podcasting to try to help others, particularly those that maybe have had a little bit of a late start.

Dr. Bill Yount:
Well, my kids got tired of hearing about finance. So, that was the birth of the Financial Literacy Project. I needed a place to basically become a library of content that I found interesting and share with others. The group grew quickly to about 2100 people. There's a lot of really smart influencers there. It's a place to share ideas, share knowledge, ask questions, get your questions answered, and realize that you're not alone in this community.

Dr. Bill Yount:
That morphed recently into another movement where I realized that my avatar was the late starter. I wanted to help others wake up earlier. And people at my stage of life wake up in time because I think after 50 you probably are getting too late. You really are. There is kind of a hard wall that you have to hit and start before then, otherwise, you're going to take a lifestyle hit.

Dr. Bill Yount:
In trying to correct that, we've started the community Catching Up To FI. It's a Facebook group, it's now a podcast. My partner is in the sort of more mainstream financial literacy space. She's retired and she had this journey I mentioned before about starting at zero at 50 and is having a comfortable retirement, or enjoying it. And now we're doing this and we bridge kind of not only the physician space, but the other space, the Mr. Money Mustache space. It's nice to sort of bring both populations together.

Dr. Jim Dahle:
The thing I love about bringing both populations together is it makes the doctors realize just how silly it is when they're saying “I can't live on $250,000 a year.” Because they turn around and look at somebody else in the community that's living on $40,000. And they realize, “Okay, this can be done. Maybe I can't have the exact same lifestyle as my partner that's never going to retire.”

Dr. Jim Dahle:
But I think it's very helpful for docs. It really grounds them to be around the typical FIRE community and realize just how much of the spending that we think is normal as doctors is very different from the life of the average American.

Dr. Bill Yount:
Yeah. My son earns about $40,000 a year and he saves 10% to his Roth IRA. And he started at 24. And I'm very proud of him. He's drunk the Kool-Aid a little bit and he's a low-income professional, so to speak. And you can do it at any income. We're privileged by being high-income professionals, but more money equals more problems. You can dig a bigger hole more quickly than other folks.

Dr. Jim Dahle:
Yeah. It's amazing how much they will loan to us, right? It's pretty typical for a dentist come out with half a million dollars in student loans, qualify for a half-million dollar mortgage, and then take out another half to a full million dollars in a practice loan. All of this, if that practice doesn't take off on an income of maybe just $150,000 as an associate. So, it's pretty amazing how much trouble you can get into just by virtue of being a high-income professional.

Dr. Bill Yount:
Absolutely.

Dr. Jim Dahle:
All right. Well, you've now had a chance to live a bit of an online life. And as near as I can tell, you've always been out there with your real name, your real face doing it. Have you experienced any episodes of kind of hate or pushback in your time doing that?

Dr. Bill Yount:
Not at all, actually. Very little. I think coming out and being vulnerable breeds trust. And people appreciate the honesty, especially for the late starters. It takes away the aloneness of the situation. And people are generally impressed that there is a recovery story. There's money addiction just like any other addiction and you have to recover that addiction, the spending addiction. And when you do that, I think people find that to be an inspirational story.

Dr. Jim Dahle:
Do you guys feel like you ever had retail therapy that you use spending to deal with the stresses of life?

Dr. Bill Yount:
Absolutely. Food therapy, retail therapy, travel therapy. Oddly enough too, in our journey to move towards FI I didn't escalate my work. I actually stepped back. And I think once you get financially literate and start getting ahead of the game, in order to manage burnout, I had to kind of weigh time to retirement with ability to work the night shifts, the weekends, the holidays.

Dr. Bill Yount:
And the long shifts physically take a toll at a certain point. As well as the risk you're managing, especially in today's medical environment. And that's a heavy burden that weighs on your mind as well. So, I've actually taken a pay cut and I'm working less. I'm fortunate that my wife was able to escalate her career at the time that I was backing off, so we haven't seen the over under drop really. We lead a balanced partnership in that regard.

Dr. Jim Dahle:
What does your shift schedule look like now?

Dr. Bill Yount:
I'm doing 12-hour shifts actually right now, and I do 10 to 12 of a month. I enjoy my time off. I spend time doing it with the podcast and working out and hanging out with my dogs, traveling. Even though we're sort of locked into less autonomy than maybe other professions, when you take more time outside of work, I think it really helps you with being able to work and come back fresh.

Dr. Jim Dahle:
You're still working night shifts?

Dr. Bill Yount:
I am. It's hard. Don't like them. If there's one thing I wish I could buy back is the night shifts. I can do everything else. The night shifts are a big proponent of burnout.

Dr. Jim Dahle:
Yeah, for sure. That was one of the first things. That was a huge motivation for me to become financially independent. I never liked that feeling you get at 03:00 or 04:00 in the morning when your body is telling you, you should be asleep and you know you need to be at your sharpest. I always found that to be a very difficult time and was actually really motivating to me to save money to get to a point in my career where I didn't have to be at work at that time in the morning.

Dr. Bill Yount:
I'm well aware that you did that. I'm jealous.

Dr. Jim Dahle:
Hopefully you get a chance to also find that opportunity. All right. What about your peers and colleagues? What do they think about this newfound interest in finance that you have? What does your family think about it?

Dr. Bill Yount:
Family is very proud of me. My kids are proud of me. And as far as the colleagues go, it's interesting. We don't have the water cooler conversations about money like they used to in the old days about stock tips. There's really very little conversation about it. Everybody looks at money as very personal. I started talking about it at work with scribes that I was working with and trying to encourage people and people realized that I was on this new path and it actually got suppressed. I was told not to talk about it at work.

Dr. Jim Dahle:
Wow. From administrators or from other docs?

Dr. Bill Yount:
From my director.

Dr. Jim Dahle:
Wow. That's interesting. Although I'm not terribly surprised. I've got a blog post coming out about an ad campaign we're planning to run for the White Coat Investor. And some of the ads we're going to run, these were going to run in hospitals and some of those advertising screens you see in hospitals.

Dr. Jim Dahle:
And we got some pushback from the advertising company and their clients, the hospitals about some of the phrasing we were using in the ads. Things that suggested maybe doctors have money problems too. They didn't want to have those ads running in their hospitals. It was very interesting. And so, this taboo out there that doctors and those in healthcare should never talk about money is still very much real and very much exists.

Dr. Bill Yount:
Yeah. I don't know. What do you think can help that disappear? It really seems like it's high time.

Dr. Jim Dahle:
Yeah. I've been working at it for 12 years. I'm doing everything I can to tell people it's okay. And it's actually naive to never talk about money. To think that you're the only people in the world that should never talk about it. It just sets you up to be taken advantage of. But as far as changing medical culture, as you know, that changes very slowly and slowest of all in the academic centers.

Dr. Bill Yount:
Yeah. Money is a common language. We need to speak it just like any foreign language and we should speak it everywhere.

Dr. Jim Dahle:
Absolutely. Well, our time is growing short, but you now have the ear of 40,000-ish people that are going to listen to this podcast. What have we not talked about that you think they should know?

Dr. Bill Yount:
I think it comes back to the investor policy statement. Just think that's a critical piece. Putting things down on paper, your goals, your dreams, both life and financial is really refreshing. It gives you a timeline, it gives you specific milestones. It's nice to watch your wealth grow according to the plan you laid out. I don't think I could have done this without one.

Dr. Jim Dahle:
That's a great tip. All right, Bill. Where can they find out more about you and what you're doing to promote financial literacy?

Dr. Bill Yount:
We've developed a website called catchinguptofi.com. Look for us there. Reach out to us there. As I mentioned before, the Facebook groups Catching Up To FI and the Financial Literacy Project. Our podcast is in its infancy. We have five episodes out. It's been warmly received and it's been a lot of fun.

Dr. Jim Dahle:
Well, thanks so much, Bill, for what you do, both at the day gig as well as the side gig. It's making a big difference and we appreciate you.

Dr. Bill Yount:
Well, thank you, Jim. Thanks for having me on.

Dr. Jim Dahle:
All right. I hope you enjoyed that interview as much as I did. Bill is a great person. And just watching how many people he has helped online. He may not be the world's greatest public speaker or anything, but boy, his heart is in the right place and he has helped a lot of people out there.

Dr. Jim Dahle:
Let me share the quote of the day with you. This one comes from Sir John Templeton. He said “The four most dangerous words in investing are, it’s different this time.” Because most of the time it's not different, even though it feels like it is every time.

Dr. Jim Dahle:
As I mentioned at the top of the podcast, SoFi is here to help medical professionals like you save thousands of dollars with student loan refinancing. Right now, qualifying medical professionals can refinance their private student loans with an up to 1% rate discount. And for residents, you'll pay just $100 monthly while in residency.

Dr. Jim Dahle:
Visit sofi.com/whitecoatinvestor, see all the promotions and offers they've got waiting for you. One more time. That's sofi.com/whitecoatinvestor. SoFi student loans are originated by SoFi Bank, N.A. Member FDIC. Additional terms and conditions may apply. NMLS# 696891.

Dr. Jim Dahle:
Don't forget whitecoatinvestor.com/cfe2023. That is the sale price for Continuing Financial Education 2023. This is like 55 hours of awesome content from WCICON23. All available to you. You can stream it on your iPhone or iPad and thus listen to it on the way to work or the way home. And it's just a great deal and it qualifies for CME. So, check that out. The sale goes from April 4th through April 17th.

Dr. Jim Dahle:
All right. Thanks for those of you leaving us a five-star review telling your friends about the podcast. Our most recent one comes in from Sarah AMK1 who said, “Physician mom. First-generation high earner. I recently graduated residency with a high burden of student loan debt and I find the Milestones to Millionaire episodes so inspiring. Beyond that, the White Coat Investor is my most trusted source for financial information. Don't tell my dad. Thank you Jim and Disha!” We appreciate that review.

Dr. Jim Dahle:
All right, keep your head up, shoulders back, you've got this and we can help. We'll see you next time on the White Coat Investor podcast.

Disclaimer:
The hosts of the White Coat Investor podcast are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.

The post Overcoming a Late Start appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.

----------------------------

By: Megan Scott
Title: Overcoming a Late Start
Sourced From: www.whitecoatinvestor.com/overcoming-a-late-start-308/
Published Date: Thu, 30 Mar 2023 06:30:05 +0000

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