Episode 24 — Physician On Fire

2018, Doctor Money Matters

http://www.doctormoneymatters.com

Please excuse any grammatical errors as this transcript was obtained via Google Voice recognition and not edited.

Welcome to another Doctor Money Matters episode. This is a great episode. I got to interview one of the superheroes of physicians and finance, the Physician on Fire, the anonymous anesthesiologist who started the very popular financial blog by the same name.

In this episode we talk about how he decided to go down the FIRE (financial independence, retire early) path, his plans now that he has reached FI (financial independence), and his advice for those who are interested in following this path.

We also get into some detail about how he calculated the numbers to determine he had achieved his goal. We also took some questions from social media and discussed his brewery investment and his own personal beer brewing hobby.

A couple of the concepts discussed in this episode:

Geographic arbitrage — Practicing in a low cost of living area while making a great income allows you to save more faster.

Sequence of returns risk — The idea that what happens to your assets (the total returns) around (immediately prior to and immediately after) retirement can determine how comfortably you can withdraw from your overall asset pool.

Savings rate — how much you should be saving as a percentage of post tax income. He challenges people to live on half your take home pay if you want to reach FI sooner. He has now reached a 75% savings rate after reaching FI as he doesn’t have a mortgage or doesn’t need to pay for disability insurance

Donor Advised Fund — An investment account that set up can make charitable contributions to via donated stock or other assets. This account can then continue to grow via the market and you can choose to make your charitable contributions over time.

Clearly this mindset has resonated with many people as the FIRE community has exploded. PoF’s website has demonstrated significant growth over its 2 year existence and he has provided valuable resources for those interested in these topics.

I want to thank PoF for joining us on the podcast. I encourage you to visit his Physician on Fire blog where you can get very valuable information.

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Transcript

Main Intro 

Intro Outro: 
[0:16] Okay welcome back to another episode of the doctor Money Matters podcast before I get started with this episode I want to thank you.

[0:22] For your continued support and the growth numbers have continued to increase significantly especially in the first quarter of this year so.

[0:32] Really want to thank you The Listener for sharing this podcast with your colleagues and I hope you continue to enjoy and learn from what we were talking about.

[0:42] I want to address something I am a real physician I’m a radiologist in Arizona it was apparently some controversy on one of the social media groups that.

[0:52] So they weren’t sure I was a physician I assure you you can Google me.

[0:57] Tarang Patel radiology and you will find I am a practicing physician in Phoenix Arizona.

[1:03] Anyway enough about that I’m excited for this episode it’s a great episode and I got to interview one of the superheroes of the physician Finance space.

[1:16] The physician on fire the anonymous anesthesiologist who started the very popular Financial blog by the same name.

[1:24] And this episode we talked about how he decided to go down the fire financial Independence retire early path his plans now that he’s achieved Financial Independence and his advice for those who are interested in following this.

[1:36] We also get into some detail about how he calculated the numbers to determine it actually achieved his goal.

[1:42] We we also took some questions from the various social media groups.

[1:47] And I we actually discussed some of the topics that people are interested in and also got into a little bit about his.

[1:54] Brewery investment and his his own hobby of brewing beer at his house.

[2:03] Top of the concepts that we talked about in this episode that I think are important Geographic Arbitrage practicing in a low-cost area while allowing you to.

[2:12] Achieve greater savings right sequence of returns risk which is the idea.

[2:19] What happens to your invent your Investments are assets near the time just prior to and just immediately after you retire can really set the stage for how much you’re able to withdraw.

[2:33] How your savings rate which is basically the amount that you should be saving as a percentage of your post-tax income.

[2:42] Physician on fire challenges people to live on half your take-home pay if you want to reach Financial Independence sooner he’s actually been doing 50% of his take-home pay for a long time and recently.

[2:55] After you Achieve Financial Independence says that he’s actually reached gotten up to 75% just because he has lower expenses including his paid off his mortgage and he doesn’t need to purchase disability insurance anymore.

[3:07] Let’s talk about it I had Donor advised fund which is an investment account that you can make.

[3:12] Regular contributions to of money or appreciated stock which can then continue to grow itself and then you can use that account to.

[3:25] Go out charitable contributions as you see fit.

[3:29] He’s reached nearly $250,000 in his Donor advised fund I myself have one but if not quite hit those numbers.

[3:40] Anyway clearly the fire mentality has resonated with many positions and and just people in general as the fire Community has grown a ton of podcasts about this.

[3:52] And his website has grown tremendously and it said in its two-year existence so.

[3:57] Hi there. His website is a valuable resource for those interested in these top.

[4:05] So anyway without further Ado physician on fire.

Dr. Tarang Patel: 
[4:09] Alright welcome to another episode of the doctor Money Matters podcast my guest today.
Is the physician on fire who runs the well-known physician Finance blog at the name physician on fire. Com.
And has demonstrated some incredible growth in the I think we’re just at the two-year anniversary of his blog now.
And he’s reached out to a lot of Physicians and to a lot of non-physicians as well giving them good tips on achieving early Financial Independence.
So welcome doctor fire how are you.

Dr. Physician On Fire: 
[4:40] I’m doing great thank you for the invitation. It’s good to be talking to you. I look forward to talking to you and everyone that listens to you.

Dr. Tarang Patel: 
[4:47] Awesome awesome well you’re one of the Pioneers in the physician Financial blogging space and you’ve given I guess that many of us inspiration to.
Get into blogging and podcasting and also just that many of us said to get our finances in order and I think you’re doing a great service to the position community.
Thank you very much.

Dr. Physician On Fire: 
[5:11] Yeah you’re welcome but I think you’re too kind to call me of pioneers and sit like you said I’m all of two years in a day doing this.

Dr. Tarang Patel: 
[5:20] Medi medi Physicians tend to be a little bit behind the curve obviously summer earlier than you but.
The white coat investor but I think most Physicians particularly at least at the colleagues that I have are relatively behind.
The curve in social media presence in fact we’re having a I’m a radiologist and we’re having a Twitter discussion about Radiologists.
Being even further behind the curve 2 in comparison to some of the other Specialties and I brought out a lot of responses and I’m hoping that we get a radiologist to be more involved just because.
We tend to be behind the scenes anyway and I think social media is a good way to.
Get our presents I get are not faces but her ideas and thoughts out there not necessarily just two patients but to other Physicians and kind of you know explain where we are and our thought process in terms of the medical care.
Let’s talk a little bit about you obviously physician on fire is not your real name we’re not going to talk about that because you’ve made a choice to kind of keep your identity on the down-low which I respect.
Tell me a little bit about that and then what got you into medicine and you’re an anesthesiologist and so why you chose that field.

Dr. Physician On Fire: 
[6:39] I’m sure yes I’m so yeah you can call me doctor fire or POF for whatever you like and I probably will have my name out there at some point but at least says I’m getting started it’s it’s kind of nice to have a little separation between the online Persona and the just my day today,
who I am but I am 42 years old I’m an anesthesiologist like you said and I come from the frozen tundra of,
Minnesota and experiencing that right now we were just talking about how my furnace went out this morning so we can chat a little bit of trouble but that’s all right it’s a balmy 34°.
35 degrees warmer than it was a week ago I came from a family of Mike is Healthcare professional,
my father and his father were dentists and my mother was a nurse and her father was a physician so it was pretty natural to,
can I follow in line I went to the same undergraduate school that my dad and his dad and my mom all went to which was the University of Minnesota and I stay there for medical school.
As far as how I chose anesthesia it wasn’t even on my radar when I started Radiology was actually pretty high.
The technology that you guys deal with this is really neat Imaging all that I enjoy it was one of my first electives and I found that.
Well I enjoy my day a little more than I did maybe the surgery or the OB guy in day where you’re rushing around in your scrubs in 4 hours at a time which I just cannot handle.

[8:09] Haha but I also want more slowly and it was dark and you don’t move around as much.
I realize Interventional and there are there other ways to have it a different 300 Radiology butts I start looking for something else in the,
I was so frightened by it I mean I saw the machine and all the tubes and lines and it looked a little overwhelming and.
And then I kind of got settled into the chair and got comfortable on sat and talked a lot of docs that seems to be pretty happy with their careers.
And I took a second rotation and anesthesia and decided that was the route for me and I I have no regrets.

Dr. Tarang Patel: 
[8:51] Very good very good so you would keep that you would not change your field if you had to do it all over again.

Dr. Physician On Fire: 
[8:58] Nope it works well for me it’s a nice mix of patient care talking to people and then maybe a little down time quiet time to I do supervised.
Rooms to go up to three or four rooms most of the time when I’m working now I’ve also worked in a situation where I’m Hands-On in one room and that’s a very different job I think my patients are asleep should follow around for a day because I probably.
5 miles ahead and talk 250 people who know it’s busy but that’s a pretty busy day most of the time.

Dr. Tarang Patel: 
[9:30] Right right so now what is speaking about your practice so that what kind of what is your practice situation right now are you an employee what type of situation are you in.

Dr. Physician On Fire: 
[9:41] Yeah I’ve done had been in a variety of situations I started out doing exclusively Locum tenens work and I did that for 2 years partially because my wife was a dietitian who mashed into a,
program it’s just like our matching program where you don’t know where you’re going to go until you get the letter,
that happened about sometime about a year or within a year after my graduating residency so we travel the country I got to try out,
different practice sites I did like I said some Hands-On stuff some big hospital stuff that small critical access stuff,
no it’s all good night I kind of found what worked for me so after that I was an independent contractor,
45 years at a hospital that eventually went bankrupt which was a big ordeal now I am in an employee situation and I’m with a.
Group of Hospital Dyersburg at One hospital and one Surgery Center.
I work 60% of a full-time job which is a relatively recent development.

Dr. Tarang Patel: 
[10:45] Okay okay so it’s actually it’s going to get into that a little bit and we’ll start out a little bit about the way you you know when did you start your journey of financial Independence talk about some of the Milestones that made you think okay I’m getting a little bit closer to where I’m at and then you know your decision to kind of transition to part-time.

Dr. Physician On Fire: 
[11:06] Yeah that’s a that’s a great question and I meet people are getting emails and comments from people that are maybe in medical school and residency and any other want to pursue this financial Independence but I feel a little bad for them.

Dr. Tarang Patel: 
[11:19] It seems a little bit early right.

Dr. Physician On Fire: 
[11:22] Yeah you know that they’ve been a long way to go and it if you’re just keep your eye on at Finish Line you might miss some of the cool things that happen along the way but.
I did not know the term Financial Independence I thought it meant like that’s when your parents stop paying for your car insurance or so.
You know you’re independent now and it wasn’t until about 3 maybe a little more than three years ago now that I discovered the term online via mr. Money Mustache and most of all fire logs that are out there.
And I kind of thought about that and this is what I was studying for a recertification written exam that was just a huge pain in the rear.
Generally make in a Denali apply the questions were not really.
Relevant to my practice and I was frustrated and I’m going to look at the numbers because.
Blogger things you have about 25 times,
as much money as you typically spend in a year then you can consider yourself financially independent and I,
I figured with the credit card bills being about $5,000 month and then little bit of cash stuff here and checks it right for property taxes I figured we spent maybe 70 75 thousand a year and,
took the number * 25 in and I looked at all of our bank statements are in a broker statements in.
Numbers matched up really well and I was like wow this is incredible I was wondering will have to take this test again in 10 years,
and it looks like maybe I didn’t really even need to take it then if I was truly ready to walk away which of course wasn’t but yeah it wasn’t something I pursued it was really something I discovered and was flabbergasted by.

Dr. Tarang Patel: 
[13:04] So in a way you’re just your lifestyle before you even thought about it kind of accommodated or our kind of was tired well with developing relatively early Financial Independence even if you weren’t really pursuing it like you said.

Dr. Physician On Fire: 
[13:19] Rightness happened.
Is about 9 years after I finish residency and I have her pretty hard when I took all the next to call they would give me even when I had permanent jobs I would work awesome locums away on a week’s off,
and I knew I was saving for something I thought it was just to have a big pile of money.
But I figured if they know decent-size piles actually probably data quits or my family and I so yeah Justin.

Dr. Tarang Patel: 
[13:50] Okay and now you know some of that obviously is a factor of I think good Midwestern values I grew up in the mid.
Yes you know but also obviously the guy assume the low cost of living Where You Are.
Do you think that and obviously.
Rates of spending on housing vary depending on where you’re at in the country and and salaries also very a bit did the term I think that’s been thrown around and I I like it is geographic Arbitrage.
How much do you think that plays a factor in your ability in terms of timing you think it may be.
Improves your ability sped up your ability by you know.
5 years 10 years versus someone out in maybe the Bay Area or Boston or something like that.

Dr. Physician On Fire: 
[14:40] So it’s huge it’s huge yeah I mean I grew up in the in the Upper Midwest my wife did too and so we want to be here but apparently not everyone does so assertive,
supply-demand issue and so the higher salaries tend to exist in the,
lower cost of living areas in your Middle America and in places that aren’t necessarily,
as sought-after for a place to live and yeah if you Google that term geographic Arbitrage My article on it will be one of the first to,
results so I’ve written about that I think I compared South Dakota to New York City and obviously there are reasons why you might,
rather be in New York City but if you can make it actively triple you know the money you know at least attempt to cost of living.
Outside car you can afford to fly to New York quite often and enjoy some things that it has without being there 24/7.

Dr. Tarang Patel: 
[15:35] Exactly potentially on your private plane if you’re willing to you know take one of these extremely high paying jobs in South Dakota or something like that.

Dr. Physician On Fire: 
[15:47] To though you know with that.
The average salary is higher in the all these places Midwest Oklahoma wherever but there are some really good high paying jobs in those high cost of living areas.
And that’s something that readers have pointed out you know it you don’t have to live somewhere that you maybe wouldn’t want to live but you might have to find the right job the right practice it’s probably going to be private practice.
Sirius app.

Dr. Tarang Patel: 
[16:13] Well yeah I speaking of that there are some extremely high paid physicians at some of the academic centers in New York and I think there was a big article talking about one of the cardiologists said Mount Sinai and the dermatologist said one of the other Ivy League.
Places so yes that but those are I think much fewer and far between and the average physician in those areas is definitely not hurting as much and then also like you said that spending more on just basic living costs so.
That definitely that definitely does play a pretty good Factor.
Okay so let’s try that into another topic that I think I’ve seen discussed on social media recently amongst different positions is.
Savings rates for Physicians what do you think is a good.
Target rate for someone you know coming out of residency starting to pay off their loans.
The numbers should they be targeting the percentage rate I mean I guess it really doesn’t matter in terms of whether their Primary Care over there there’s some super high end specialist.

Dr. Physician On Fire: 
[17:16] Well I mean it makes it a lot easier if you make more money numerator vs. denominator but,
and it’s also it depends on how you calculate it to because a lot of us are paying a lot of tax are also paying down a lot of debts and so you know the first few years out you might not be putting a whole lot towards retirement so one person’s,
20% maybe someone else is 40% and it just depends on how you calculate it and I’ve got a calculator on my sites savings rate calculator where calculator.
A net savings rate and a girl savings rate so kind of comparing after-tax or or before tax cuz if you’re paying a third of your salary and tax well.
It’s hard to say 50% when you’re down to.
In up 17% after the taxes are paid but it generally not seat 15 20% being tossed around as.
Adequate Torino doing really well and it’s enough to get you financially independent within maybe 30 30 some years.
It’s a really long time especially if burnout enters your life if you have some other Financial setback like.
Divorce or or something horrible along those lines I challenge people I don’t I don’t know what I would I wouldn’t necessarily say I recommend but I challenge people to live on half of their.
Take-home pay half of their after tax money essentially and with the other half you pay down debt you save for retirement and you’re going to be.
Translate dependent that was in about 15-20 years depending on how much that you start out with if you can do that.

[18:50] Now it’s you know you start out with and let’s say you’re making two to three hundred thousand you might be taking home a hundred and fifty to two hundred thousand and you’re living on 75 to a hundred thousand.
You know that doesn’t include what’s going towards your student loans that that can come from the savings,
yeah and I’ve got to live on how challenge that’s another post I’ve written that has a spreadsheet and lays out,
exactly how long it’s going to take you to be able to continue that lifestyle indefinitely as a family independent physician without having to rely on any additional income.

Dr. Tarang Patel: 
[19:27] And let me just ask you this what do you think it when you were working full-time what would you estimate your own savings rate was.

Dr. Physician On Fire: 
[19:35] It has varied quite a bit but I would say,
then once we kind of got over the let’s build a huge house and fill it with furniture and buy brand new hot tub.

[19:48] Since then I would say it’s been at least.
50% and now it’s probably 75% because once we became financially independent we had decided to pay down the mortgage about the same time so I don’t have a mortgage since we’re not.
Relying on my income to fund their lifestyle we don’t really need term life insurance or disability insurance those are important when you’re when you rely on your income at once you.
Are financially dependent by definition that you can get by without the income so I would stop,
paying those I have the number cheats like that public schools etcetera so when I was working full-time,
last year I probably saved about 75% of our after-tax pay and it’ll be a bit less this year because I’m working,
part-time so I have less income and the same expenses if not a little bit more cuz we’re traveling quite a bit more.

Dr. Tarang Patel: 
[20:42] Right okay okay so let’s go into that a little bit so you transitioned at the end of last year into this year you know you’re now 60% at what point do you see yourself kind of full retirement.

Dr. Physician On Fire: 
[20:55] It’s a work-in-progress I am really loving the schedule that I have right now I work basically a,
four-day weekend or surgery center that’s what 40 hours and then I put in a 72-hour weekend that starts on Friday morning at the hospital and some of that is home calls I’m not,
there should be two hours straight but that’s a really really busy 7 plus days but after that I’m off for the rest of the month so I’m off 3 to 4 weeks at a time.

[21:21] Yeah yeah it’s pretty slick I was that’s kind of the way I wanted to arrange it so we could do a little more of what I would call a slow travel or semi slow travel,
and so I am not in a hurry to walk away from this and actually it turns out there is a young man from the place,
that are the town that I’m living in and he is in The Residency program that I used to be in and he has signed on to return in about 18 months from now so he may be my replacement it could be that there is additional work,
and then I could continue on for a little bit but I’m pretty much committed to the next 18 months and then what kind of see what happens from there I may actually line up some locums work,
even after I leave my last permanent job here but we’ll see how I feel at the time.

Dr. Tarang Patel: 
[22:05] Right right this would be just based on your desires not necessarily any financial needs or anything like that this is just what do I want to do to kind of keep myself active besides the blog in your travel plans and things.

Dr. Physician On Fire: 
[22:19] Right it doesn’t hurt to overshoot the Target and we’ve already done that you know where somewhere in the range of any 33 to 35 times now what we normally spending but you know if there’s health insurance that we’re going to cover it somehow there are potential suits cost that we haven’t really considered a thought about so,
yeah I’m uncomfortable doing what I’m doing and doing what I’m doing and if I end up with too much money that’s a much better problem to have,
walking away too soon and then having two samples at Costco although I can imagine worst things to do in retirement.

Dr. Tarang Patel: 
[22:54] Hey my wife complains that I spend too much time at.
So I guess that’s so we’re going to go have a little bit about some of the more popular topics that you cover actually is Adams beginning of the year so it’s the right time,
the backdoor Roth IRA so let’s let’s talk about I know you have a good instruction guide on your website but just got to explain the terms a little bit.

Dr. Physician On Fire: 
[23:21] Sure so I just made my six pair of backdoor Roth IRA contributions and the reason I called the back door is if you make a certain amount of money and for a couples,
and now in 2018 that’s $199,000 I think that’s your modified adjusted gross income most positions are physician families are going to come,
and it’s even lower for singles in the gungeon 33,000 so if you earn more than that you cannot contribute directly to a Roth IRA account,
however there is a way to get money into a Roth IRA account and it is a.
Two-step process basically you make a nondeductible contribution to a traditional IRA.
And then you wait a day or week or month or whatever you’re comfortable with as far as I know no one has ever gotten in trouble for,
are there any briefs weight of like a day and then you can put that money to Ross and that’s just a few clicks of the mouse on your broker website.
And now you have what has so far proven to be a legal way to get money into a Roth account and of course of Roth is beneficial in that,
there is no tax drag on at the money in rostros tax-free and there are also no taxes when you take money out later on in retirement and so,
it’s just a way to basically take money that you probably otherwise would have left in a taxable brokerage account.

[24:51] Also has some advantages but will be subject to at least a little bit of tax dragon and potentially capital gains taxes later on when you want to use the money so it.
Hit chips up to $5,500,
for yourself and if you’re married you can also do 5500 for your spouse whether or not they have income you can do a spousal IRA and edit your shipping that from what would have been a taxable investment to a tax-free investment.

Dr. Tarang Patel: 
[25:17] Good I I know that it’s a topic that seems to come up quite frequently and I referred people,
to your website and will continue to do so but I think I was a good explanation I just had like you said most Physicians this is a very simple way to get some of the benefits of tax-free growth so.
Encourages all of us to to do it so let me ask you this now you know you’ve got you’ve got your.
2535 * savings how do you determine your asset allocation now,
you know that you’re starting part-time work are you changing it at all from being you know when you were accumulating assets.

Dr. Physician On Fire: 
[25:58] You’re not really miss con two parts to this you know one of you know done a lot of reading on let me know what is the ideal asset allocation at various points in life and then serve the traditional.
Advice for over the years has been to,
slowly transition to having more and more Bonds in your portfolio and some people like to use age in Vons or age minus 10 or minus 20 in bonds as a percentage so if you’re 50 years old.
8-10 would say 40% bonds 60% stocks more recently yet I think there’s been a pretty compelling.
Literature that suggests maybe you could have a study asset allocation or even what the color of reverse guy path wear because and this gets a little bit.
In the thick weeds but.
The first 10 years or so of retirement you could suffer from 1 to call sequence of return risks if things go sharply down when you’re first starting to draw down on your,
retirement assets you need to be protected in that initial. If you get through that first 5 or 10 years without.
Your 2000 crash rate you’re 27 and 2007 crash where everything dropped 40 50% if that does not happen then you’re kind of golden and then you can actually bring.
Your stock allocation wrap down your bond allocation and remain aggressive and that will just allow your money to more than likely grow faster and it really just depends on your your risk tolerance you know what you are comfortable with are you.
Are you going to feel better about yourself and your location and sleep better at night if you are someone that knows you have enough let’s say you can just buy.

[27:38] Inflation protected bonds and ride it out and never run out of money or would you rather kind of let it ride and see it grow much faster and leave a legacy donate,
a lot of money to charity and ran for me and I guess I’m a little more on the aggressive side so I want to have about.
You know at least five years worth of bonds to help write out a big drop in the stock market.
That with the remainder of my assets I like to keep them invested in the type of asset that will give the best very long-term outcome return and that that would be stocks so I’m I’m about 90 10 right now I might,
about 8515 maybe even 80 20 depending on what the numbers look like but then on the other hand.
Isn’t necessarily the same thing as when I retire for medicine as I’m learning.
Having watched the white coat investor state of the blog posts and seeing my own Revenue Canada ramp up here so even my retirement is a bit of a.
Not a very good indicator for others since I will still have some income coming in as long as I continue to before the blocking and do the things I do there online.

Dr. Tarang Patel: 
[28:50] Right okay so let’s talk a little bit more details sequence of returns letting dad say an important term and that’s when you were saying and let’s just kind of spell that a little bit more so what you’re saying is when.
It’s a series of returns and in this case what we’re talking about is when you first retire or not even when he first retired maybe the years right before you retire.
Did the first three to four years after retirement maybe a seven or eight year span around the retirement time where.
A significant change in your portfolio whether it’s up obviously that’s good but a significant downturn can really impact what happens 20 years.
From now because you’re starting at a much lower point if in fact there is a big downturns I think that’s a very important that you brought up I’ve read that before and then.
Something that I think you know most of the audience is probably not.
Nearing retirement yeah but if they’re thinking about financial Independence and retiring early it is a factor that they should consider because like you said.
What happens in that time span it was basically a very important determining factor in what happens and how long you’re going to be able to retire at a sustained.
Withdrawal rate so.

Dr. Physician On Fire: 
[30:04] Can a predicated on lock 2 for the most part.

Dr. Tarang Patel: 
[30:06] Sure sure.

Dr. Physician On Fire: 
[30:07] Early retirement now is a website to use a PhD economist,
and he does a lot of very in-depth Research into safe withdrawal rates and secrets of return rest and you know that that 4% withdrawal rate or maybe it’s no 3.5 or 3.3 if your little more conservative,
that’s based on basically the worst case scenario of sequence of returns that.
If you come out at a time or you don’t have a particularly bad sequence of returns at the time like you say just before and after retirement.
Then you can probably have a safe withdrawal rate of 5 maybe 6% you know if you were tired a good time even as high as 8% if you were tired of it at an ideal time so the 4% is.
Almost the worst case scenario I was just reading on Bogle heads. Org that’s it for him that has a lot of really smart people.
And someone had posted the results from retirees in the year 2000 who use the 4% safe withdrawal rate in this was a looking back of retrospective look at the result if they.
The 4% that first year.
Increased with inflation that withdrawal every year and where would they be now even though they had a huge drop right away 40% and then another 50% and the stock market in 07 oh 80809.
And actually they’re doing pretty darn pretty darn well it’s surprisingly and then I guess it’s probably because we had a nice run up since the latest drop.
Looks like even for them retiring it probably the worst time in the last 50 years.

[31:41] They are going to make at least the 30 years that the 4% rule is designed to get you and so that does give me some comfort that even if you have a pretty darn bad sequence of returns which,
if I were to retire in the next couple years here that could very well happen and we’re going to have a very Market at some point and.
If it doesn’t happen forever tires probably going to happen shortly thereafter but before somewhere below three and a half percent then I really am not concerned about that.

Dr. Tarang Patel: 
[32:10] Okay good I sent you know that I think you brought up a good point and this is a discussion that a lot of Physicians particularly those who were in training around the 2000 and 2008 crashes.
They’ve seen this happen twice relatively early in their career and I do actually that’s a good thing because it’s giving you time to buy more assets at lower prices but.
The psychological damage is that they feel like they need a much higher multiple of earnings or a a much lower withdrawal.

Dr. Physician On Fire: 
[32:42] And anybody even worse it it keeps people out of the stock market well they lost half their money before they’re never going to make that mistake again right but old but now they missed out on almost quadrupling their money since at least.

Dr. Tarang Patel: 
[32:56] Absolutely.
But I think that’s a very good point tonight I saw something recently thing I was on kites this blog about like what you were talking about even up to an 8% withdrawal rate has been relatively successful given the right timing.
So I think I think people I mean that I’m not recommending that bite.

Dr. Physician On Fire: 
[33:14] No never never would either.

Dr. Tarang Patel: 
[33:16] No but.

Dr. Physician On Fire: 
[33:17] In hindsight you can see that in that could have worked at certain times.

Dr. Tarang Patel: 
[33:20] Exactly what the.
But the 2% I feel like it’s like wow I mean you know if you want to be very conservative that’s great but I would just like at some point there’s the end of goal for many people.
Is going to be on a Chiva Bowl if they just continue to be that conservative but hate that’s in to each their own and I think being more conservative I guess in in this scenario is better than not being conservative enough.

Dr. Physician On Fire: 
[33:42] Right and if you have no real interest in retiring you know what you might work until you’re down to a .5% operating you know and have way more money than you need but.
You enjoy what you’re doing and you like watching that balance grow by all means and keypad it.

Dr. Tarang Patel: 
[33:56] Exact exactly okay so let’s let’s talk a little bit about your lifestyle now that you have transition to part-time,
I think we we discussed a little bit before I start a recording about your travel so you recently spend some time in Mexico tell me a little bit about that.

Dr. Physician On Fire: 
[34:15] Sure yep that’s something we’ve been looking forward to is just having to,
time to take a vacation that wasn’t a 7-day trip with two travel days and 5 days of squeeze everything in you know that’s kind of what we did earlier in the year we took our boys to Paris France and Reykjavik Iceland in the whole thing was,
done in 10 days we really had 3 travel days and have no it was a whirlwind a lot of fun.
But not the type of travel we’d like to have sex with this new schedule we can disappear for up to 3 weeks at a time,
and we cleared it with her boys principal we got kids in grade school second and third grade and he said yeah you know what you’re talking about sounds awesome so and what we’re talking about is not just,
so damn big for 3 weeks but we went to the central Highlands of Mexico come up in the mountains and we found.
Spanish language school that we could all attend together and we did that for part of the day it did a little bit of the sort of homeschooling in a way it with our kids even though they do go to the public school just to keep up with her.

[35:16] And then then just got to enjoy the local culture and take will side trips. I was just very relaxing and it was a,
really nice way to travel it’s count felt more like living there then then being application ER.
There and it was awesome and we’re going to do something a little bit simpler in February were disappearing for another,
3-week Adventure although this will be a little bit busier as we’re going to stay on three different Hawaiian islands and can see what that’s all about I’ve been to Hawaii before but but not too.
A couple of the islands that were visiting and I managed to get my flight paid for it because there’s a c m e.
Seminar and so I’ll do that for four of the 23 days that we’re going to be gone.

Dr. Tarang Patel: 
[36:02] Awesome.

Dr. Physician On Fire: 
[36:03] Yeah and then bring to meet up with another personal finance blogger Doug Norman at the military guy he’s going to teach us how to surf I was taking one lesson before but.
Affordable than the one I took a Turtle Bay up on the North Shore.

Dr. Tarang Patel: 
[36:20] Very cool very cool and it’s awesome that your boys principle is you know allowing them to do that cuz I think a lot of schools very regimented and very structured about how they only have this many days. That’s all that’s fantastic.

Dr. Physician On Fire: 
[36:34] Yeah I didn’t expect him to be so easily swayed he had no issues with it at all so.
I take that back they like to keep the kids in public school and if they think they’re going to lose them and lose the tax dollars that come with them.

Dr. Tarang Patel: 
[36:46] They’re willing to work right.

Dr. Physician On Fire: 
[36:50] Yeah yeah and we might also look at doing some Mission work I found it place in Central America that encourages you to bring your families and so you don’t want to bring her kids somewhere you don’t live in Mexico to serve a third world country in a way but,
innocent help them see that we don’t all live so well like they do here in America.

Dr. Tarang Patel: 
[37:10] NN just the travel in general I think it is a great way to expand their Horizons so that’s that’s that’s great talk to me about some of the future goals you have with the position on fire website.

Dr. Physician On Fire: 
[37:24] I’m going to keep doing what I’m doing which is right at least one pretty throw blog post that I publish every Tuesday on Thursday I have,
select guest post that I think they’re pretty good and we have the white coat investor Network that dr. Jim Dolly and I started based on his sight the white coat investor,
and we now have added passive income MD to the Mets and so we share each other’s,
articles and we do that on Saturday so I’m sharing something that one of them has polish previously but it’s probably new to my audience or,
if it’s something that you before it probably has been years and on Sunday I do,
recap around up where I share some of the best articles that I’ve read over the past week and then there are some other things I I might want to do anyway,
if I can find the time I might write a book or create course something that is a little more concise because when people come to a Blog you’ve got this just.
Collection of articles but they’re never latest chronologically ordered in the way that they were written and and it’s a little.
More difficult to find exactly what you want if you’re just.
Wine start from scratch figure this stuff out it’s hard to do with the block bonds are great for inspiration and for maybe finding the answer to a particular topic.
But maybe something that brings it all together I would keep recording podcasts like I’m doing with you today and yeah.

Dr. Tarang Patel: 
[38:54] Cool cool Olivia I have solicited some questions from some of your fans and social media land so we asked you a couple here in Texas.
If we visit Minnesota can we get some beer from your I think are you invested in a brewery or a part-owner or something like that.

Dr. Physician On Fire: 
[39:14] Indeed yes David you are welcome to to share a beer with me well actually you can have the whole beer and I’ll have them,
I do have investments in two birds and the Upper Midwest here on one is an ownership of Porsha and the other is a little bit of a alone to them and I also grew a beard and so I got a Homebrew setup and I’ve always got something on tap that I enjoy so yes David come on up,
we can we can pour some babies.

Dr. Tarang Patel: 
[39:43] Nice nice know what what is your what what type of beer do you brew.

Dr. Physician On Fire: 
[39:46] My go-to is an IPA or pale ale but I’d like to goof around and I’ll make a chocolate porter I do a Sour Patch Kid wheat beer that,
Skype app,
popular I use rhubarb for the sour and actual candies that hit dump in there in the fermenter for the flavor and it it turns out amazingly good.

Dr. Tarang Patel: 
[40:07] Very nice I’ll have to try the chocolate porter so I’m up in that neck of the woods but.
Let me ask you this actually just got up on the beer topic. Yeah I see a lot of ipas and make them happier and healthier what were your thoughts about that.

Dr. Physician On Fire: 
[40:24] I applied it I enjoy that and I you know if a beer gets overly bitter but it’s hard to drink a personal,
if you balance it out with the flavor on the back end and when you brew we do that by throwing hops in very very late in the boiler even after the boilers are dry hops or Whirlpool hops is it at the school I’m going to get a lot of flavor and Aroma out of those mess really what I,
like more than that the bitterness and the latest trend is the Northeast IPA over the last year or two is going to take it over and that’s it and Ice hazy,
IPA that that has very little bitterness but lots of the Top flavor.

Dr. Tarang Patel: 
[40:59] Okay I’ll have to check that out I’ll write another question you from Teresa the creator of Doc wife.com.
Have do you have a date night with your wife and describe a typical one if you do.

Dr. Physician On Fire: 
[41:14] Okay we do although we don’t get a babysitter all that often at least a few times a year and usually that’s if we have.
Silica.
Fundraiser at charity gala type thing but we don’t have that you know every 2 weeks every 4 weeks that we have a babysitter and go out to eat that sort of thing I’d say more often than not typical date night for us is,
African go to bed which is usually about 7:30 7:45 so we still got you know,
give me two two and a half hours before bedtime and we’ll mail we got a hot tub that we really enjoyed because that year round,
we might just watch a movie together I want to show other we’re not necessarily leaving the house it’s our time and that’s pretty nice.

Dr. Tarang Patel: 
[41:59] Awesome great Drake from the VAC in Pennsylvania what are your weaknesses or vices in regards to savings.

Dr. Physician On Fire: 
[42:08] I think I’ve done a pretty good job of eliminating most of those we did mention beer had to buy some expensive beers without a Time although compared to a wine habitats.
I suppose travel would be the big one right now when I book The Hawaii trip.
I was able to get my flight reimbursed that I actually use miles from credit card bonus rewards to book my wife’s and my kids light but once we get there then we’ve got,
Airbnb rental cars in Treasure Island flight so,
even with those advantages and I were still I think I already had about the $78,000 mark and we’re not even there yet.
The Mexico trip cost less than half that for 3 weeks. I was pretty darn good but.

Dr. Tarang Patel: 
[42:57] Right well Hawaii’s just let me know it’s expensive no matter how you cut it and they’re what you know so but but it’ll be a great trip so that’s that’s all right.

Dr. Physician On Fire: 
[43:04] Yeah and that’s the place where it’s worth it to spend a bit of money.

Dr. Tarang Patel: 
[43:07] Exactly exactly alright last question here from Chloe do you have any concerns about getting health care for yourself if you inspire too many Physicians into early retirement.

Dr. Physician On Fire: 
[43:18] That’s great question yeah I do my interview Izzard are written I do a Christopher Guest post and I had,
JL Collins do one he’s well-known for a his book The Simple path to wealth and his stock series on his blog JL Collins nh.com,
well my goal is to commit to not retire early because I’m pretty old and I got some health problems and I want to be around so if you’re not a doctor you should read my blog.
Ignore all of this you know I’m not too worried about it because I know lots and lots of positions I know that very few are actually going to live up to the same about half Challenge and.

Dr. Tarang Patel: 
[44:00] Right right.

Dr. Physician On Fire: 
[44:01] You know I think maybe that it will become more of a popular idea but really what I would like to encourage Physicians to do is not to just outright quit as soon as they can.
Yeah and just use their financial Independence to find the job that is best suited to them and that might be a lower-paying job maybe it’s working less maybe it’s working in academics where you can do,
more research are more teaching and less clinical time maybe it’s taken just a half day every Friday or finding the right geographically,
location maybe you’ve done the Arbitrage thing and I like alright well South Dakota was pretty good,
I want to get back to where my family is in in Miami or wherever so so I,
Financial Independence to help design the lights that you want and for some people that will include not working and medicine at all but,
hopefully we can continue to yours our training for as long as we remain engaged.

Dr. Tarang Patel: 
[45:01] I think that’s great advice I I completely agree I Feel the Fire part I think focusing on the S5 part and the retiring early is more up to you and you know how you want to do it but the financial Independence let’s III we want to get Physicians to that point so they have more choices and,
people such as yourself and Doctor Dolly and and many of the other blogs and podcasts out there are helping to spread the word so I want to thank you again for coming on this podcast I wanted to ask you one other thing you website you do some charitable stuff tell me a little bit about that.

Dr. Physician On Fire: 
[45:38] I do have pledged to donate half of my profits from the website to charity and I do that via a Donor advised fund which I’ve written about pretty extensively and that’s the way where you can donate money to an account,
that you can’t get the money back that you can decide when and where it is donated to end so it’s just kind of a nice way to take advantage of,
call tax deduction in your Higher Learning years and then go all that money out over whatever. Of time you choose so yeah so far I got donated a lot more money to charity than ever so I’m kind of paying it forward a little bit.
If the site does continue to grow in the the way that it has high I made end up donating hundreds of thousands of dollars more to charity which would be awesome I’ve already got.
I got a quarter million in that door advice on just from working that I’ve done and that’s most of that was donated deal before but.
Small black and Company website and that continue to grow and then I can get more from every year yeah that would be awesome.

Dr. Tarang Patel: 
[46:40] Awesome well I want to thank you Doctor fire for participating in this podcast I want to ask one more thing tell those who don’t know where they can connect with you on social media and your website one more time.

Dr. Physician On Fire: 
[46:53] Sure the website is physician on fire com as physician o n f i r e and I have the same Twitter handle,
and also on Facebook just search position on fire and I need you to find I’ve got paid for the site and they made me change my name as the persona,
physician on fire which is not a real name to something that looks like a real name so if you see a Milo Anderson with two s’s,
my Landers son and it has my POF logo that’s me to.

Dr. Tarang Patel: 
[47:27] Right actually that one last question because this was brought up when I was asking some people what some for some questions to you is Milo Anderson a anagram from Voldemort I think you got a Harry Potter question I’m not a Harry Potter 4.

Dr. Physician On Fire: 
[47:42] My kids are reading all of those books and they’ve been read to the novel reading and it’s nothing to do with Harry Potter,
Milo is a family name and Anderson was the name my family had when they came for over from Sweden and then it actually changed it when I got to Minnesota because Minnesota is full of.

Dr. Tarang Patel: 
[48:00] I can say that’s a very good at that’s a very good Minnesota news.

Dr. Physician On Fire: 
[48:03] Yeah so they change it from Anderson with two s’s to what is now so I just kind of put that together when I was they were going to cut off my Facebook access so I had to throw something together quick.

Dr. Tarang Patel: 
[48:15] Got you got you thank you. Your fire Milo Anderson appreciate you being on the show.

Intro Outro: 
[48:23] Thanks for listening to this episode of the doctor Money Matters podcast and I want to thank my guest today physician on fire.

[48:29] For joining us I hope you enjoyed the podcast and I encourage you if you already haven’t visited to check out his position on fire blog where.

[48:39] He has tons of valuable.

[48:42] Articles about reaching Financial Independence comparing different doctor Lifestyles a savings rate calculator.

[48:50] How to do your backdoor Roth IRA and many other good topics.

[48:57] Please continue to support this podcast by leaving positive reviews I am getting.

[49:03] Fair amount of positive feedback via instant messaging or.

[49:09] Via email but if you could I would appreciate you leaving.
ITunes reviews with those same comments it continues to help this podcast grow and as I’ve said before police report all of your other all the other physician podcasters out there as well.

[49:29] This podcast is available on Apple podcast Google play Stitcher Spotify etcetera.

[49:37] And once again you can follow me on Twitter at Dr Money Matters and on Facebook or Instagram at dr. Money Matters all spelled out and you can join our private Facebook group doctor Money Matters.

[49:50] From further discussion about some of these topic once again thanks for listening and another episode will be coming out soon.

Main Intro