When it became clear to me in my first year as a private practice attending that I didn’t enjoy my job and was headed on a road towards quick burnout, I went on an intellectual rampage trying to find “an out.” Armed with the internet and a steady paycheck that was well below average for an interventional radiologist in the southeast but significantly above what most Americans will ever make, I decided that something needed to be done about my situation and it had to happen now.
I caught wind of the FIRE (Financial Independent Retire Early) movement. Doing some quick math it was pretty easy to realize that any subspecialist physician in this country should be able to reach financial independence within 10 years doing nothing but diligently saving and investing in broadly diversified index funds. One of the intellectual champions of this movement is this guy named J.L. Collins. I read his book titled “The Simple Path To Wealth.” This book was quite enlightening. While I encourage you all to read it, the main ideas can be summed up in several points:
- Save up an emergency fund of 3-6 months worth of living expenses.
- Pay off high interest debt.
- Max out your tax advantaged retirement accounts
- Invest in broadly diversified index funds and don’t worry about what the market does because in 30 years it doesn’t matter.
- Save FU money.
This plan is by no means sexy, but the history of financial markets in America would suggest that this is a pretty sound and headache free plan. It largely constitutes my retirement investment philosophy, though I have since made some post-tax investment modifications including the addition of real estate to create tax-advantaged cashflow, because that’s how much I hated my job.
So step 1 for me was to pay off high interest rate debt. For my spouse and I that was our student loans at 6.8%. We were fortunate in that our combined loan burden was significantly less than most early career physicians, though still sizable: $150,000. In a period of 9 months we eliminated the debt.
I of course contributed to my group’s retirement plan, fully funded a back-door Roth IRA and kept my investments in VTSAX/VTI.
The final step was saving up FU money. Freedom Unlimited though it certainly can mean the other thing. This is an amount of money that gives you the freedom to leave any situation that you don’t like. For me, this number was $100,000. I spent the next 6 months after debt payoff saving this while trying to find my next opportunity and a back-up to that opportunity.
By eliminating our debt and having significant cash on hand, I was able to take risks that most would not be able to take. I think this is important especially for interventional radiologists keen on independent practice.
While the math would suggest that I should have refinanced those loans and used the money towards investments, I have absolutely no regrets eliminating that debt. You never know what life will throw your way. For me, I quit my job right before the Covid lockdowns of March 2020. That backup teleradiology side gig evaporated. I did not make a single dime for over 5 months in 2020 and it was really nice not having to worry about making student loan payments.
When the OBL situation was not working out the way I was hoping it would, I decided to move on. Only this time I had even more cash on hand, other sources of clinical income and a growing portfolio of income producing assets.
By creating financial leverage for yourself, you create options. This is very important as medicine becomes more corporatized with reduced incomes, fewer equity ownership opportunities and overall less favorable practice environments. Physicians are often taken advantage of because we are inherently in a weak financial position when we enter the workforce. And it isn’t just corporate types taking advantage of physicians. Other doctors definitely take advantage of younger physicians. Interventional radiologists are no exception to this, despite how nice they may seem. I fully embrace the theory that we are happier when we practice because we want to and not because we have to.