Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
My questions are in bold italics and her responses follow in black.
Let’s get started…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am 48 and my husband is 57 years old.
Married 21 years.
Do you have kids/family (if so, how old are they)?
We have one child, 19 years old.
What area of the country do you live in (and urban or rural)?
Urban Southeast.
What is your current net worth?
$6.9 million
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
- Employer retirement accounts: $882,000
- Taxable Brokerage account: $4,735,000 (allocation 75% stocks, 25% cash/bonds)
- IRAs: $650,000
- College 529 plan: $120,000
- Bank Account: $147,000
- Home: $350,000 (latest Zillow estimate)
We have no debt.
EARN
What is your job?
We are both employed physicians, one in academics.
What is your annual income?
- Physician salaries: $972,854
- Military Retirement: $50,000
- Investment Income: $77,092 (all reinvested)
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
Well I had my first job bagging groceries in 1986 for $2.90/hour with time and half on Sundays. Yes, I (and my husband) have come a long way.
I won’t bore readers with odd jobs during college but for both of us our first regular occurring paycheck was as residents. We were both military physicians followed by 5 years of continuing to work for the government, so we didn’t make the kind of income our counterparts outside of the military were making, but it didn’t seem to impact growing our wealth because we were always saving.
This is our combined AGIs over time as a snapshot:
- 1997: $133K (first year married, dual physician income)
- 2000: $208K
- 2005: $285K
- 2007: $293K
- 2008: $292K (bear market…lower dividend income)
- 2009: $325K (first year collecting military pension)
- 2010: $429K (one of us working part time)
- 2012: $433K
- 2013: $595K (both working full time, left government jobs)
- 2014: $676K
- 2015: $785K
- 2016: $840K
- 2017: $1,071K
What tips do you have for others who want to grow their career-related income?
Earned income isn’t “free”. It comes with effort.
As a physician we can see more patients or take on administrative roles. For me, the later boosted my income.
For my husband it was geographic arbitrage. He works at a rural hospital which pays him more money than when he worked at a metro hospital.
What’s your work-life balance look like?
I work full-time without call.
Husband works in 2-3 week blocks per month.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
Military pension: $50,000 (Benefit after active duty service of 21 years.)
Dividend Income: $70,000 (Dividend income kicked from our investments.)
SAVE
What is your annual spending?
Last year was unique because we spent money remodeling our home and our son was in private high school. Those expenses are gone now. [Editor’s note: This interview took place in December 2018.]
This year our spending with only a couple weeks left in the year is $191,000.
What are the main categories (expenses) this spending breaks into?
I left out taxes (we don’t spend that money). We pay about $500K annually in taxes.
After taxes:
- Travel: $48K (we like to travel, but also included is my husband’s travel expense to his job)
- General Merchandise: $18K
- College Expenses (Housing, I used 529 to pay. Otherwise he has scholarship): $13K
- Child Expenses (extracurricular activities, primarily over the last summer): $11K
- Restaurants: $10K
- Groceries: $9K
- Home Maintenance: $7.9K (this includes our HOA which covers lawn maintenance, garbage, recycling, exterior home care, walls out insurance for home, roof care)
- Personal Care: $7.4K (I bought a Peloton…that is about 50% off that expense right there).
- Insurance: $6.5K
- Rent: $5.8K (my husband has an apartment when he is working those 2-3 weeks/month)
- Electronics: $5K
- Pets: $4K
- Clothing: $4K
- Entertainment: $4K
- Telephone: $4K
- Cable: $3K
- Gifts: $2.8K
- Educational Dues: $2.5K
- Utilities: $2.5K
- Healthcare (Dental): $2K
- Cars/Gas: $2K
Do you have a budget? If so, how do you implement it?
No, we don’t budget all, but I keep track of our expenses.
All our money, other than individual retirement accounts, is jointly pooled.
What percentage of your gross income do you save and how has that changed over time?
We save about 50-60% (Half to taxes, with the remainder spend 40%, save 60%.)
What is your favorite thing to spend money on/your secret splurge?
Eating out, travel, coffee.
INVEST
What is your investment philosophy/plan?
Dollar cost averaging. Don’t’ miss a beat.
Philosophy is pay taxes, pay yourself and then have the ability to spend whatever is left.
I think a lot of people pay taxes, spend and then save whatever is left leaving their savings rate too low.
We have dollar cost averaged into our retirement savings for the last 20 years.
Every week we bought 3-4 stocks with a fixed amount of money.
It is the “buy and hold” philosophy. Keep buying, buy regular, hold forever.
Our stock allocation is about 90% all individual stocks and the other 10% of funds in employer accounts.
We don’t use a financial advisor.
What has been your best investment?
The investment of the education and time in training to become a physician.
There is no doubt the earning potential of a physician opens many paths to wealth. But it isn’t easy by any means….countless days of call, working on holidays, missed functions, etc.
There is a sacrifice to become a physician.
We have also done very well with many of our stock investments.
What has been your worst investment?
We bought a single unit rental property for an investment in 2005. Then the housing market crashed.
It took ten years for the value to recover to price paid.
In the meantime, the interest, taxes, insurance were at a loss compared to the incoming rent.
The place was occupied the entire time by the same renters. It was at the point the place was going to start to need increased maintenance (appliances were breaking, etc). So we decided to cut our losses and sell.
What’s been your overall return?
It is a little hard for me to calculate. We started our finances together before internet and online tools were available. We moved our money around different institutions over time which also “resets” the return.
We have money spread all around so aggregate data for us is lacking over time.
The last few years we have outpaced the S&P.
How often do you monitor/review your portfolio?
I use the Personal Capital platform to follow/review all our accounts, to include our son’s accounts (checking, brokerage and credit card).
All our accounts are aggregated on the site. I review the daily email each day to monitor transactions.
NET WORTH
How did you accumulate your net worth?
Our net worth was accumulated by dollar cost averaging about 50% of our income since we were married.
Neither of us has inherited money.
We both started working with minimum wage jobs progressing to highly compensated physicians.
We always maximally contributed to our employer retirement accounts and dollar cost averaged weekly into our own account.
I always paid extra to our mortgage when we had a mortgage. We were completely debt free in 2013.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
We excelled in the latter two.
Most people would say our earning was successful too, but compared to most physicians, our dual physician income was well below any published average until the last several years.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
We have been through the bear markets. We never changed our investment strategy.
What are you currently doing to maintain/grow your net worth?
Currently, we are still working even though we have six figure passive income.
We still reinvest all our dividends, max out our retirement accounts and systematically dollar cost average (pay ourselves).
Technically, we are still in the “accumulation phase” but most would probably agree we could stop working.
We have about 5 years of expenses in cash to weather out any economic catastrophe along with collecting one pension now.
I will also have a pension at age 60 along with our social security benefits (assuming we get something).
Do you have a target net worth you are trying to attain?
No.
We have already exceeded a net worth of 25x our living expenses.
It would be nice to hit $10 million by the time I’m 70 but not sure we will hit that since we won’t be working that much longer.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I think we had a million dollars in 2008, maybe sooner.
We didn’t think much of it at the time. It was around the time of the financial crisis so we knew we had to just keep growing the pot.
Nothing has changed. We kept on earning, saving and investing. Since then we have eliminated all debt.
What money mistakes have you made along the way that others can learn from?
The real estate venture didn’t work for us. I know many build significant wealth this way. We should have just stuck to what was working best for us, which was market investing.
What advice do you have for ESI Money readers on how to become wealthy?
Save early and safe often.
Minimize debt.
Be educated about your finances.
Trust no one. No one cares about your finances more than you.
FUTURE
What are your plans for the future regarding lifestyle?
We would fit the profile that some would consider “Fatfire”.
Besides retiring early, we really don’t need to trim down to a frugal lifestyle. We can retire now.
I likely will work another year. My husband will probably not be far behind. He enjoys his job much more than I do.
What are your retirement plans?
Travel, crafts, exercise.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
The inability to predict failing health.
I fear most not being able to enjoy retirement. I have seen too many people with morbidities and many die within months of starting retirement.
Life is short. Hence, retire early.
MISCELLANEOUS
How did you learn about finances and at what age did it ‘click’? Was it from family, books, forced to learn as wealth grew, etc.?
I’ve always understood saving and compound interest.
I have had a savings account since I was in elementary school.
I balanced my checkbook down to pennies in college.
I started reading books when I finished medical school.
My husband and I would listen to radio and TV shows on investing.
Who inspired you to excel in life? Who are your heroes?
Both of us were self-motivated.
We worked and studied hard to get to where we are today.
Personally, I don’t have “a hero”. I cherish all my friends and family who have supported and encouraged me along the way.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Rarely and not a lot.
Because we were both military at some level I feel I have given already. We have 34 years combined active duty service.
The remainder of the US population who never serves (roughly 90%) can pick up the slack and support charities. We’ve served to provide their freedoms.
Do you plan to leave an inheritance for your heirs (how do you plan to distribute your wealth at your death)? What are your reasons behind this plan?
We only have one child and given our assets now, there is likelihood he will inherit any unspent money.
We live the same lifestyle as we did 20 years ago.
We do not have any life insurance policies for legacy purposes. If we outlive our heir, our money is to be left with charity.
Bernd Doss says
On the surface you have achieved the dream of many. Thank You for your service and that of your husband. Bravo Zulu.
Razorback 14 says
Congratulations!!!
You guys are a “True” living example for all —ESI — especially to young medical professionals who seem to have a tough time making things work —-
Savings rate over time is impressive—- WOW. Nice job.
Really enjoyed this interview!
geohillary says
I am puzzled by the conflict in your stated stance on giving but then your ultimate conclusion that if you outlive your son you would leave your wealth to charity. If no charity has inspired you to share your wealth today, then why bother to count them as an option tomorrow? I would challenge you to look for a charitable organization that inspires you today while you can impact lives and gain the life long satisfaction that only sharing your abundance can provide.
Chris says
Interesting article (really love this series!), but I was really put off by the response that they won’t support charities and consider their service (for which they were paid and are getting a hefty pension) to be their charity. Very disappointing.
M-121 says
Agreed 100%. Charity is giving freely. “Serving” that gets remunerated in real-time PLUS a life long, inflation-indexed pension isn’t giving freely.
105 says
I disagree. They both served in the military long term AND they both give back to society via their careers as physicians. Of course they are well paid for that, but there are many well paid professionals in fields with MUCH less or even debatable value to people and society. Not to mention the $500k in taxes they pay goes largely to support various government entitlement programs which direct money back to the disabled and poor as well as lots of other causes. And they spend freely, contributing to the economy versus hoarding it all. And they’re investing in their child as well and his education.
Giving to charity isn’t the only way to help make the world a better place. In fact it’s not even all that efficient of a way to do so in many cases. People need to stop being so judgmental about this. The two of them together are generating more benefits to society in a myriad of ways than most of us ever will, regardless of whether they ever give much to organized charities.
Josh says
You guys were doctors in the military, maybe near the frontlines but not on them. I am a veteran and then served in the government afterwards. I give to charity. This country has done so much for me that I think its incumbent to give back, even if I’m not in uniform anymore. Saying “I served in uniform, you guys are on your own” regardless of circumstance is a regrettable attitude. You have more money than you know what to do with, please reconsider your attitude towards charity. Heck, give to charities that help struggling vets.
Matt says
Full disclosure, I didn’t serve in the military, so my opinion may not be worth 2 cents on this topic. And I certainly don’t mean to judge the interviewees one bit. Charity is a personal decision.
Given all the struggles that vets face (PTSD/suicide, jobs, injuries/etc.) that I see in the media, I would assume that those who did serve would be even more charitable helping their military brothers and sisters. Besides helping other vets, military personnel have a special window into the suffering in this world. Studies show that for about $3500, you can save a single human life by preventing malaria. Surely that’s an easy decision for anyone that reads a blog about millionaires.
But before we judge this interviewee, how many of the millionaire interviewees have said that they don’t give much while they are earning, but plan to volunteer during retirement? My guess is their plans to volunteer in retirement lasts for a couple months before it ends. Surely this interviewees service (along with her husband) is worth more than that?
Phillip says
The AGI over time disclosure was very insightful. Without that data, I would have assumed MI123 was raking in $1M per year for years. I wish all MI interviewees would share this level of detail as it could yield better insights on how much patience, hard work and sacrifice played in the person’s wealth accumulation journey.
Heidi says
Also disappointed in the attitude toward charity.
Razorback 14 says
For the record, I’m not disappointed with these two at all —- as with everyone who has joined to ESI team —- we’re all different and we’ve ALL developed different plans.
Plans from other members will teach and guide you/us properly, if you allow the information to sink in. Good or bad —- it’s their plan and your Plan is yours.
If they add something that doesn’t work for you and your plan —— that’s fine, simply read it and carry on. Words can cause great people to stop sharing and that’s not what this site is all about —-
In my mind, it’s all about a process anyway and by sharing all you’re doing may be the example these people need and can incorporate in to their future plan, if they choose to do so —
Share your plan, and your ideas in a meaningful way —— and let these folks shine on. They’ve done well in a number of areas and I see them as givers —- I’ll never question how they give.
Bernd Doss says
For those who are disappointed by the willingness of the interviewee to Express their intentions with regard to charity, I quote you the following spoken so many years ago by Henry Wadsworth Longfellow: “The life of a man consists not in seeing visions and in dreaming dreams, but in active charity and in willing service.”
So many tend to overlook those who serve or have served, and those who in serving suffer indignities and injuries so that others may enjoy the freedoms of earning and participating in donating time and funds to charitable organizations.
Anne says
To those coming down on this couple’s attitude to charity: they’re paying about half a million a year in taxes. That certainly should cover the “charity” base – that money is going toward schools, roads, health care, Medicaid, Medicare, veterans care, and a host of other things. I’m part of a couple in a similar tax bracket, and it feels like over 50% in taxes should “count”.
M-121 says
it is their decision Fred, to be sure, but it became the business of everyone who reads this blog when she posted on this blog so that it could be read. readers don’t set their values aside so as to read this blog. We all bring our perspectives and values to this blog.
I for one am pleased to see the number of readers here who found her entitlement and bitterness a bit harsh, though I do agree that tone is tough through text and give the benefit of the doubt.
certainly they’ve done an admirable job saving and earning and investing, and owe no one anything–if that’s their choice. but it isn’t wrong of the other readers on this blog–most of whom make far less than these two–to be taken aback at what they perceive as a stingy, entitled attitude toward giving.
m-121 says
compulsory taxes aren’t the same as charity–charity you give freely. taxes are something that are compulsory, and which I and many others on this blog spend a good bit of time trying to legally limit. The same doesn’t apply to charity.
MI-119 says
Hi fellow physicians 123,
As I read thru your interview, I was surprised to see how many of your responses could have been substituted with mine and vice versa, and the interview would essentially read the same! Not everyone realizes how much one has to reinvent themselves to continue growing their AGI consistently as we do. We have similar savings rate, level of spending and manage our own finances as well.
Of note, your tax rate appears to be quite high. Not sure if you are including every day sales tax for purchases or live in a state with state income tax. Your long term capital gains tax rate should be well below 50%. As your income grows you may want to give this more consideration, as I have over the past few years. I’m closer to an 30% rate (no state income tax), but own a $2M home and $4.5M in commercial property with great depreciation value, a family HSA account, and a business with the benefits of enhanced expenses all by design to lower or defer taxes. I do appreciate that not everyone has or wants these specific avenues though, it’s just how I decided to manage taxes.
Ultimately, you are fortunate and have exercised wisdom, patience and diligence in your financial planning. Keep up the great work by giving further comfort and compassion to your patients and your blessings will grow!
Folks, regarding charitable giving, it means different things to different people. Charitable words that lift people up rather than cause grief and anxiety should be exercised in communicating with those who put themselves out doing these interviews. Clearly 123 feels that their military service, often at great sacrifice, was their major form of charity. Whether we agree or not, ultimately it’s what’s in a man’s (or woman’s) heart that counts. During my ESI interview, one commented on increasing my charity but did so very tactfully – and I responded as well as I can regarding my current activities while admitting my shortcomings in wanting to do more but not yet doing so. While taxes are obligatory, it is true that most of their significant taxes go to those less fortunate.
Peace and prosperity to all!
John says
Everyone will have their opinions on the above attitude toward charity (and I can see both sides of the issue expressed in the comments. I don’t know what is in their hearts, but I’m inclined to give them the benefit of the doubt and I’m so grateful to all Army docs who’ve helped me in my career), but I want to add this one point of clarification:
those of us who serve in the military are lucky to be able to do so, and we aren’t owed anything. On the days when the profession sucks the most (especially thinking back in my career to 6degree days in December on the DMZ in Korea or during a year in Afghanistan), I try to remember how lucky I am to serve the ideals of democracy and the American people. I’m 12 years in, and I know there will come a time when I will have to take the uniform off, and it will be with gratitude in my heart for the opportunity to serve. Whether we express that overtly or not, I believe that each of us knows this immutable fact in our hearts.
Fred says
You guys that are criticizing them for their decision about charity… it’s their decision and none of your business.
Sandy says
Regarding charitable giving: the way it was stated came across as harsh and from a place of bitterness when I first read it. From other commenters, I think it came across that way to many people.
You would not have received your professional training, your ability to earn at the level you currently do, nor your ongoing pension without the other 90% doing their part. It takes us all in the UNITED States of America. Thank you for your service.
Paper Tiger (aka MI-27) says
Sandy, very well said and mirrors my thoughts too. I don’t mind them having a right to their own opinions on charity, I just didn’t understand the tone of entitlement it came with.
117 says
Sandy I agree. I try not to judge people too often but their position was bitter and harsh.
117 says
Let me be more precise. It was this comment that was out of line entirely:
“The remainder of the US population who never serves (roughly 90%) can pick up the slack and support charities. We’ve served to provide their freedoms.”
Insulting honestly. Wow.
STEVE WRIGHT says
Fred, if you want people to mind their own business then I don’t think you put your story out on social media for all to comment on. Once you post on a forum like this, you kind of forfeit your right to full privacy. I think a healthy debate on a subject like charity is actually a good thing. Many people who post here have been blessed, are fortunate and hardworking. Anyone with a net worth of over 1M sits in the top 1% of global net worth or put another way, is more fortunate, financially speaking, than 99+% of the rest of the world.
“To those who much is given, much is expected,” (sometimes even if they feel they have already given enough.) Whether one chooses to give any more is an individual decision and that, I would agree, is their own business.
Jeff says
First thanks for sharing. Next thank you for serving. Many of my closest allies got their medical training through the armed forces and I’m grateful for their training and service. They are wonderful guys who continue to give back in the form of volunteer work as well as having practices that benefit me and mine.
Physicians as a group tend to be less savvy financially because of rigorous training in the early years and work schedules over time. You guys have done a fantastic job of accumulating money and being on top of your earnings game as well.
I do believe that the tax implications of this larger W-2 income could have been better managed. That’s a very high tax bracket and there are ways of offsetting those sort of W-2 earnings by another 15-20% with proper advice. Next to earning money , the single biggest thing we can do is to manage the taxes associated with those earnings. I’m a 1099 and so my very best years are often when I earned the least amount of money. Think about it.
As far as everyone being offended by the comment regarding charity – that’s not fair. It’s absolutely their choice. But again, reducing taxable income through charitable contributions is just another tool of managing tax and truly growing wealth. We should likely thank you guys for your “charitable” tax contributions to the federal government.
Great share. Thank you for it.
Millionaire73 says
Really enjoyed your article and would highly recommend looking into a Defined Benefit Pension Plan if you haven’t already as a way to reduce tax liability as a great option for doctors or high income small business owners + has more flexible investment options than a 401K/SEP IRA. I found out about this 4 years ago and have consistently been able to put in 200-300K tax deferred and really lower my yearly income taxes and with some investment appreciation it currently sits at 1.275M (in 4 years) and when I compare that to the 969K total I have in 401K/IRA which was from the 20 YEARS before that it is even more noticeable.
Just thought I would share.
Millionaire 73
https://esimoney.com/millionaire-interview-73
Phil says
It sucks that you work for the government from January to June doing charity work and you start your income in the month of July – in my head, that’s exactly what 50% taxes mean 🙂
I have served on boards of non-profits and for many of those non profits, 90% of their funding comes from government grants. Less than 10% comes from private donations. ( I was amazed that a 400k annual gala fund raiser took more of the board members time in comparison to the annual budget of $ 40 million ) But the people who give these private donations for the gala’s and other fund raisers are the ones who get to gloat and feel good about “giving” to charity. The people contributing to the 90% government funds ( like this doctor couple disproportionately contributes towards) are apparently just doing their job.
Charity is a personal dilemma. We can choose how you want to make a difference and how we want to mentally classify that contribution – whatever helps us sleep well at night.
That being said, the net worth of 6.9 million is on the lower side for strong income levels for many years. ( average of 463k per year over 18 years – if my math is right). Perhaps this is because of your high taxation levels. A business owner with same level of income would easily have 2 to 4 times the net worth with this level of income – simply because of the number of tax havens and write offs available for business owners.
Vigaro says
Excellent tax followthroughs worth considering, but I imagine they are disinterested. The charity ‘controversy’ or debacle is flipping hilarious, though. Love the unflinching rationality and unrepentant attitudes . . . SATAN is happy with your progress! Totally kidding . . . I see no reference to religion or spirituality whatsoever, but there’s nothing evil regarding pure logic or materialism anyway. Lots of fake people go to church every week, and for what? One life, babe; one and done. Beyond heredity and environment, one’s position in the world is such a blank slate . . . anything goes. Popularity is another thing; unlike me, they have perhaps wisely decided to say nothing further. Let it stand for all to reflect upon, I say; plenty of coverage in the other direction for all other persuasions. The wry, grim riffage regarding retirement and financial counseling is priceless, even refreshing, but then I can’t imagine living anything like them. To each their own, and thank you for your service.
Vigaro says
‘Be educated about your finances.
Trust no one. No one cares about your finances more than you.’
Vigaro says
‘We have about 5 years of expenses in cash to weather out any economic catastrophe . . . ‘
LOVE
‘I have seen too many people with morbidities and many die within months of starting retirement.’
WORD
Father retired at 55, lived to 82. Brother succumbed to lifestyle issues, age 54. Mother and oldest brother have gambled themselves into near poverty. 51 here. Baa baa black sheep, have you any wool? Plenty . . . thank you.