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.
This interview took place in April.
It’s a unique interview in that both the husband and wife add in their individual points of view.
My questions are in bold italics and their responses follow in black.
Let’s get started…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
We have been married for 7 years. Husband is 41 and wife is 34.
We decided to tackle these questions together because we thought it would be a fun exercise for us. And also because we have different thoughts and emotions about money. We will to attempt to highlight where there are differences in our answers to these questions.
As we are fans of the books and TV show Outlander, we’ll use the names Jamie and Claire to delineate answers.
Do you have kids/family (if so, how old are they)?
Yes, we have two boys — a 2 ½ year old and a 6 week old.
Yep you read that right, we are currently writing this while on leave. 🙂
What area of the country do you live in (and urban or rural)?
We live in a high cost of living city in the midwestern US.
What is your current net worth?
$2.37M as of Spring 2022 when we are writing this.
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?
Assets:
- Cash: $61,200
- 401k: $111,870
- Simple IRA: $148,400
- Roth IRA: $21,900
- Taxable brokerage: $1,380,705
- Employer Stock: $28,510
- Primary Home Value $1,460,000
- 529 for 1st child: $39,450
- 529 for 2nd child: $30,015
- Car: $30,125 (included here because we will likely sell it this year)
Liabilities:
- Primary Home Mortgage $938,000
EARN
What is your job?
Claire: Manager in a fortune 100 pharmaceutical company.
Jamie: Analyst at a healthcare investment fund.
What is your annual income?
Highly variable as you will see in further details, in 2021 it was jointly ~$525,000 gross.
Of that total Claire was paid $165,000 and Jamie $360,000.
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?
Jamie worked at a garden center for minimum wage during high school.
In undergrad he worked in a research lab between classes and in a hospital laboratory in the evenings. He lived at home through undergraduate and saved the majority of earnings to reduce the student loans needed and contribute to the family’s house costs. He didn’t have any savings and incurred about $60,000 in debt after graduating undergrad with a degree in biology from a large midwestern state school.
Subsequently he enrolled in graduate school doing biology research, and received a $21,000 a year stipend. This also allowed deferment of student loan payments, however they continued to grow at 6.8%.
He graduated with a MS, realized he did not want to be an academic scientist and ended up going to the coast to pursue a research career in biotech startups. There he worked in a series of companies for 5 years as a W-2 employee paid between $34,000 and $40,000 as a research associate.
Theoretically he was also compensated as an inventor in intellectual property that was generated, but that was back ended royalties if a drug was ever approved. None of the companies made it that far, which is typical for the industry (<5% of all drugs that enter clinical trials are approved, the number that are actually commercially valuable is even lower).
On advice from a company board member he went back to graduate school to study for a PhD. Jamie was lucky to get accepted to a top tier research university and was paid a stipend between $29,000 and $32,000 per year over the 5 years of research.
After defending his thesis, Jamie joined an investment fund as an healthcare analyst, and has been there for 6 years. Compensation is tied to fund performance and can vary tremendously. The amounts listed below are gross numbers that we’ve broken out by base salary and a performance based bonus.
As a note this is somewhat simplified from the actual details which include ownership of illiquid assets within the investment fund and not all of the value is paid out regularly or even at all. Any ownership within the fund itself is not considered in our net worth, but as shown for 2020 some value was realized and paid out as compensation.
- 2016: $100,000 salary, $124,400 bonus ($224,400 total)
- 2017: $100,000 salary, $148,740 bonus ($248,740 total)
- 2018: $100,000 salary, $245,800 bonus ($345,800 total)
- 2019: $100,000 salary, $324,580 bonus ($424,580 total)
- 2020: $100,000 salary, $1,034,600 bonus ($1,134,600 total)
- 2021: $100,000 salary, $286,200 bonus ($386,200 total)
————————-
Claire worked concessions at a stadium in high school, and during undergraduate at a large state school worked in a research lab as well as with a catering company. The majority of these earnings (~$15,000) were invested in a Roth IRA and (~$20,000) in a taxable brokerage. She received scholarships that covered the cost of tuition. She chose the large state school largely due to the economics compared to other school options.
After graduating undergrad with a degree in biology Claire enrolled in the same top tier research university as Jamie. Claire was paid the same $29,000 to $32,000 stipend over the 5 years of work and study. Upon graduation she enrolled in business school to pursue an MBA degree. Claire has a passion for both science and business and she wanted a role that used aspects of each.
The process, cost, and overall value of getting an MBA is perhaps a whole separate discussion. But in summary the tuition costs were just north of $125,000 total, which have been paid off. As above, the amounts listed below are gross numbers broken out by base salary and performance based bonus.
- 2017: $50,000 salary, $10,000 bonus ($60,000 total) [half year of employment]
- 2018: $115,000 salary, $22,000 bonus ($137,000 total)
- 2019: $120,000 salary, $25,000 bonus ($145,000 total)
- 2020: $129,000 salary, $27,000 bonus ($156,000 total)
- 2021: $131,000 salary, $30,000 bonus ($161,000 total)
What tips do you have for others who want to grow their career-related income?
Networking is what it is all about. It is hard to stand out when applying for a job in a large or small company without a personal connection or warm introduction. Hiring the wrong person for a position is a huge headache and can turn a smooth running team into a mess. So everyone just wants some assurance that a new hire will be a good fit with the existing team, and demonstrating that is difficult in a traditional interview process. Hence the importance of references that can really speak to the qualities you’d bring to a role and how you operate within a team.
We always try to reinforce the idea and remind people that it should be a monthly goal to connect with at least one person inside or outside your organization. Ideally not with anything more in mind than learning about them, what they do, and where they want to go in their career and other personal goals. Sometimes you can help them accomplish something, sometimes they can help you, but most of the time it is about friends and community.
Doing your best to authentically invest in your relationships can be a huge factor in the career opportunities that come your way.
What’s your work-life balance look like?
During graduate school you live and breathe what you are doing 24/7, working with brilliant but occasionally challenging colleagues.
The cohort you train with helps keep you sane, and it is no coincidence that so many spouses meet in graduate school, medical school, or other intense training environments.
Claire currently works a typical corporate 9-5 with reasonable work-life balance and occasional travel (short trips once every few months).
Jamie’s schedule is more unpredictable, but generally works around market hours. That involves reviewing SEC filings and press releases at 6 am and jumping on discussions about financings after the market closes. He is typically done by 7 pm unless working on a specific deal. Travel to conferences is a few days a month, with the occasional week long trip a few times a year.
With 2 young children we definitely plan to prioritize quality of life over income if we need to. But of course extra income can provide luxuries that save time, such as a laundry service or a nanny. We don’t use those two examples, but are always trying to evaluate the tradeoffs.
Both of our jobs can be quite stressful at times, but our strategy of having one person in a more reliable corporate position and the other in a high risk, high reward position has worked well thus far. We expect that at some point those roles may flip and Claire will follow a more entrepreneurial path and Jamie will seek a more stable position.
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?
No other sources of income currently.
We are interested in getting into real estate investing at some point, likely direct ownership or syndications. We are still exploring on that front.
SAVE
What is your annual spending?
Still getting a handle on this as we recently moved into a new home.
We use multiple tools to track spending (Mint) and investments (Personal Capital) and have a loose budget (see the budget question below).
Over the previous 5 years we spent between $100,000 and $110,000 per year. In our new place we expect that will increase to $144,000 ($12,000/month). Prior to our current professional careers we lived on between $40,000 and $60,000 a year combined in the same high cost of living area.
What are the main categories (expenses) this spending breaks into?
Below is an average per month for the last 6 months. The Other category catches more irregular expenses:
- Home: Mortgage, Insurance and Taxes $4500 (38%)
- Home: Supplies and Services $1135 (9%)
- Kids: Daycare $2324 (19%)
- Groceries: $560 (5%)
- Restaurants: $966 (8%)
- Utilities: $680 (6%)
- Transportation: $260 (2%)
- Other [Travel, Medical, Gym, Pets]: $1560 (13%)
Do you have a budget? If so, how do you implement it?
Yes, but it is no longer as strictly adhered to as we have in the past.
We mostly use it retrospectively to see if we are staying within the guideposts we’ve agreed regarding spending. We typically review every 3 months, and we will pick a specific category to look at closely to see if we are getting value for what we are spending on.
In the last year we have moved from a budget focused approach to a goal of living off of one income and saving the other. And we can guilt free spend within those limits.
This approach has been helpful because Claire is by nature more frugal and Jamie is a spender with a lot of money anxiety. Jamie tracks expenses and classifies things into the appropriate category once a week. That way when we review the numbers together it can be done relatively quickly.
Given our different money approaches we try to create a prospective budget for a specific project (plan a trip, decorate a room, etc.) rather than just try to cash flow it. Seems obvious, but we avoided doing it because we’d just debate endlessly on each aspect in isolation.
Sitting down and agreeing what we are both comfortable spending on a project in total allows Claire to try to find deals and ways to save money and enjoy the process. And Jamie has guidelines so he doesn’t go crazy spending on what may not really be valuable to the experience and prioritizes the key items.
What percentage of your gross income do you save and how has that changed over time?
Given the variability of Jamie’s income over the last 6 years we focus on trying to live on Claire’s salary and save whatever income we have from Jamie’s salary and any bonuses from either of us. As described above we tend to think of it less in terms of percentage of gross income and more about aiming for as close to 100% of one partner’s income as possible.
In terms of percentage I have a difficult time thinking about how to represent it given the low absolute dollar values over 5 years of training and work for Claire and 13 years for Jamie. In total our net worth went from approximately -$200,000 to $2.37M over the last 6 years on approximately $3.4M gross income plus investment returns.
Before and during graduate school Jamie’s net worth was negative and any cash flow (not much) went towards student debt payments. Claire saved a significant percentage in high school and undergrad in a Roth IRA and a taxable brokerage, but pursuing an MBA cost more than $125,000.
What’s your best tip for saving (accumulating) money?
Claire: I’ve always just saved whatever I don’t spend. I’m on the frugal side and sometimes will overthink even small purchases. I also take any recurring purchases really seriously, since those add up! [Note from Jamie: It is not unusual when Claire mentions that she wants to buy something that I find she’s been tracking prices and comparing options for more than a month by the time she’s willing to even mention it in a conversation].
Jamie: Try to surround yourself with friends and colleagues with good money habits to help reinforce the best money behaviors in yourself. Sometimes it is hard to stick to a plan when you are working in isolation.
What’s your best tip for spending less money?
Claire: If you’re shopping, do not pick up the item if you think it might just be a “want” and by the end of the trip if you remember and still want it, then get it. A lot of times you’ll forget it!
Jamie: I don’t feel very qualified to answer this as I’m pretty bad at pure saving and tend to focus on earning first. But one thing I would add is to choose your partner carefully. It is hard to get the right balance of different perspectives on money. It can be helpful to look at problems from different perspectives, but not be so far off that you can’t understand how the other person thinks about the topic.
What is your favorite thing to spend money on/your secret splurge?
Claire: Tech stuff! I loved making our home a “smart home.”
Jamie: Kitchen gadgets and camera equipment. I just can’t help myself!
INVEST
What is your investment philosophy/plan?
We try to keep things very simple and we are very risk tolerant given we have long time horizons for the dollars we are investing.
We focus on low cost index funds and the only individual stocks we own are part of our compensation from an employer.
Our target allocation is the following:
- 60% total stock market index
- 10% small cap index
- 10% international index
- 10% real estate (indexed REIT ETF)
- 5% broad bond index
- 5% alternatives
While this is the target allocation, we currently deviate from it as we have no alternative investments, and only half the desired real estate position. This is partially due to having limited access in our tax deferred accounts to low cost REIT indexes. Both of our tax deferred retirement accounts are reasonable but limited in terms of quality investing options. We recently decided to add a small allocation to alternatives, but haven’t yet put much money to work there. Part of the small cap index (<1% of overall portfolio) is in a biotech index, the XBI.
Comment from Jamie: Having worked in the investment industry now for a few years I have become ever more focused on low cost broad index approaches for two reasons.
One, my day job involves taking very risky positions in individual companies so I don’t feel like duplicating that risk in our portfolio.
And two, I’ve seen what it takes to try and get an edge in an investment thesis. The large number of experts in different disciplines, the computational resources, the ability that ownership gives you to direct companies to the path you believe is best, etc.
Even so, in my view anything more than about 60% confidence in a particular investment is mostly an assortment of biases and luck rather than true insight. That is why economic scale, access, and domain expertise are the three pillars of institutional investing, and even then things still go wrong.
What has been your best investment?
In terms of returns, the boring holdings in a low cost S&P 500 ETF has done well.
But we fully expect smaller companies to outperform over the long term. We have a slightly enriched small cap allocation, but want to add this is a stable allocation not that we’ve added small cap because we expect to outperform in some timeframe.
We are very risk tolerant and hope to not sell any of our current investments in the next 20 years.
What has been your worst investment?
As of the moment the XBI biotech index, down over 30% year to date.
We have <1% of our net worth in the index. One part play money, one part helping us to keep perspective on the healthcare sector.
What’s been your overall return?
Our broker’s website has it as 9.6% across the different taxable and tax deferred accounts over the last 6 years, but we haven’t done an independent analysis. We try to focus more on contributions than returns at this stage of our careers. We have an asset allocation we are comfortable with and working toward, and you can’t control market returns.
It was closer to 6% for the investment accounts prior to that time period, the holdings were primarily in a target retirement date fund with a higher bond allocation and slightly higher fees. We haven’t looked at blending the numbers or looking at performance prior to graduate school given the absolute numbers were relatively small.
How often do you monitor/review your portfolio?
Claire: Not very often. Unless I need to allocate new investments, I like to just invest and then not touch anything.
Jamie: Far too often, near daily.
NET WORTH
How did you accumulate your net worth?
We invested significant time into our education which has opened many doors to pursue high paying careers, but also included delaying the “start” of our careers.
We would say don’t be afraid to make these investments in your long term career potential and to do it early if possible. It is a lot harder to pursue some career avenues with family and lifestyle obligations in place, but not impossible. Much easier to frontload as much as possible, like cardboard boxes for tables, ramen for dinner, and such in your 20s rather than 30s and beyond.
We reached our current net worth by pivoting to high paying careers after completing our education, paying off student debt as quickly as possible, and trying to save all of one partner’s earnings.
One missed opportunity would have been house hacking in grad school, but we didn’t know anything about the approach at the time. We rented and enjoyed the freedom from maintenance and other ownership obligations.
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?
Claire: Savings [Jamie would say that she rarely spends money on herself, mostly on others and enjoys savings wins and finding good deals.]
Jamie: Earning [Claire would say Jamie is not frugal but works hard to generate enough income so that it does not become an issue. It is almost a type of motivation to succeed.]
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
Significant delayed gratification and the difficult decision to invest more time and money for Claire to pursue a MBA before either of us had started our post education careers were small bumps to navigate.
A bigger road bump was Jamie’s poor judgment with buying a condo not long before the financial crisis, with it immediately under water and trying to manage it at a distance during graduate school. It ended up being a large time and money hole until finally offloading it 5 years after buying it. We lost at least $75,000 on the property in the end.
What are you currently doing to maintain/grow your net worth?
Stay the course, both of us enjoy our careers and feel like we are finally getting started in them. Our main financial goal is to grow our taxable investments to allow flexibility for entrepreneurial pursuits, which may require significant startup funds. Jamie’s job is in the high risk, high reward category and it is difficult to know how long the current opportunities will last, investment funds come and go in this industry.
We are also exploring expanding our real estate investments, but are wary of managing properties ourselves. We don’t really want to sacrifice time with our kids to be buying and installing toilets in a rental property. We’ve also noticed it can be difficult to buy for cash flow in our area given our high property taxes. Appreciation seems a more reliable value driver historically.
We have started to think about owning non-local property, but don’t have a network or anything in place yet. Also part of the attraction of real estate for us was that if we owned rental property in our neighborhood a majority of our property taxes would go to the local school our kids will attend. Might be a bit of mental accounting, but we like the idea that we would get some indirect value for those tax dollars.
Do you have a target net worth you are trying to attain?
Until recently we thought about $3M as a target, however we’ve been listening and reading to people talking about stretching yourself to be more ambitious in your life goals.
So it has us thinking what could our resources allow us to do. It is an exciting endeavor to start thinking more openly about what is possible on the financial, family, and community front. We don’t have complete answers yet, but creating a non-profit to tackle some specific issues we are passionate about is becoming more of a focus in the medium term.
How old were you when you made your first million and have you had any significant behavior shifts since then?
It was a little tricky for us to know, as part of Jamie’s compensation was tied up in illiquid ownership in the fund he works for. We never included that in how we looked at our net worth, but we had a liquidity event and were able to access a large amount of capital in 2020.
At that point it was clear we were over the $1M mark, but we were more focused on being first time parents and freaking out about every little cough. Eventually we recognized the achievement and got a babysitter for a nice date night at a favorite restaurant.
What money mistakes have you made along the way that others can learn from?
Claire: At first I didn’t invest my money in the market and it just sat in a money market account. This was high-school and early college. The only silver lining was that I missed the Great Recession. But I also missed out on the many years of growth.
Jamie: So many mistakes, but I’ll just pick one, education. Growing up we never talked about money in my family, I was not educated on the subject and I did not seek it out. I was very academic focused and I wish I’d realized the value of practical financial education earlier and started building saving habits from a younger age. Bad habits are hard to break after years of reinforcement. Today I have a lot of checks on impulsive spending. For example I don’t know my Amazon password. I have to go find it written on a piece of paper I’ve placed in an inconvenient location if I want to buy something. It might seem silly, but I’ve found these tactics helpful.
What advice do you have for ESI Money readers on how to become wealthy?
Anybody can be an expert, all it really requires is curiosity and genuine interest in the topic and the wisdom that results from a reasonable period of time contemplating it. You can cultivate it in any field related to your career, side gig, or hobbies and it will give you joy and economic benefit.
If you can marry expertise with soft skills, and learn to motivate people with a variety of personality types your economic potential is huge. Then the real work starts: what problems to focus on, what type of organization is the best to accomplish your solution, and who do you want on your team.
FUTURE
What are your plans for the future regarding lifestyle?
We hope to be able to continue to take on bigger and bigger problems over time, possibly through entrepreneurship.
Jamie would like to have a vacation home or short term rental investment property in the mountains, but Claire would prefer to not be tied to one location for travel and be a bit more ambitious.
We took some amazing trips pre-kids and are still learning how to do them as a family. There is just so much more stuff to carry around now!
What are your retirement plans?
We both hope that we never fully retire. This may be an artifact of our delayed start to our careers and we’ll think differently about it down the road of course. But for now, our goal would be to focus more on mentoring and non-profit work as we get into our 60s, but keep active in our industries.
We would expect to downsize our living situation once the kids are grown and focus more on slow travel internationally. We don’t yet know what this lifestyle would cost and Jamie will likely spend some portion of the next 20 years making excel spreadsheets and worrying about quantifying the cost/benefit. 🙂
Are there any issues in retirement that concern you? If so, how are you planning to address them?
Not really on our retirement as we plan to stay active in our industry by consulting, sitting on boards, teaching as long as we are healthy enough to do so.
Our main concerns revolve around questions on family. How much do we want to give our kids and when? How best to help care for our aging families? How to plan for a sabbatical to deal with unexpected issues that come up?
We feel we navigated our education with some thought to cost and career earning potential. So we hesitate to take away that responsibility completely from our kids. We plan to have them attend public school through grade 12 and support them to some degree if they pursue college and/or professional studies.
However, we also recognize the costs continue to climb to surprising levels and want to make sure education cost is a factor, but not a barrier for them. Would appreciate any perspectives others have on how they have approached these questions.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
Claire: I can remember saving and spending my own money really early. By middle school I was doing small jobs or selling my old toys in garage sales to save up. I bought myself a $200 trampoline! It continued on from there and I started neighborhood pet sitting/babysitting/housesitting (advertised and all). I’ve always enjoyed earning my own money to buy what I want.
Jamie: I would say within the last 2 years, when I really started diving deep into books, research, whatever I could find on personal finance. Prior to that I really only did what I had seen others around me do and didn’t think too hard about the why. Finances were an afterthought, honestly never really expected to make enough to have the happy problem of worrying about things like diversification and tax optimization.
Who inspired you to excel in life? Who are your heroes?
Claire: My parents have always been a big motivator and put a lot of emphasis on academics. My spouse motivated me through grad school and beyond. I don’t have a singular hero per say, but I’m inspired by entrepreneurs that have created a company and had an impact.
Jamie: Definitely my wife and my family — you get up in the morning to try and make the people you love proud of you. Secondarily, I’ve always been inspired by inventors and scientists, people who took a chance to do something new. They are sometimes very flawed people and there can be valuable lessons there as well. But sometimes they are just full of exciting or funny stories. Two examples you may not have heard of I encourage you to Google are Barry Marshall and Maurice Hilleman as some random examples.
Do you have any favorite money books you like/recommend? If so, can you share with us your top three and why you like them?
Our three favorite money books are: A Simple Path to Wealth, The White Coat Investor, and The Psychology of Money.
Our three favorite money blogs at the moment are: ESI Money, ERN, and Banker on FIRE.
Our three favorite money podcasts at the moment are: Afford Anything (Paula Pant), I Will Teach You To Be Rich (Ramit Sethi), and Financial Samurai (Sam Dogen).
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
We do give a small amount to charity (target of $10,000 per year).
We plan to increase this with a donor advised fund approach, but currently we just give cash to specific organizations or geographies in need.
In the past we have focused on donating time rather than money, but time is in very short supply for us these days thanks to having 2 boys under 3 years of age.
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 hope to be involved with or create nonprofits that tackle topics that are important to us and expect to donate significantly to those over time. Claire has ideas in the area of helping people get better access to medical care and Jamie wants to create a dog rescue.
Both of our parents would rather have seen their parents able to spend their retirement savings on themselves instead of passing it on later in life to already grown children who don’t really need it at that point. And we both have a similar attitude. What is important is money and support to launch children, but the need for an inheritance decreases significantly after that in our view.
So our plans are to support the cost of education and beyond that we are not sure yet. We are a bit terrified of some of the stories older colleagues share of kids getting too much money too soon. Not just that they waste it, but the effect it may have on their attitude and career if money is disconnected from hard work. We definitely plan to read more on this and welcome thoughts on the topic.
One idea we find attractive for a child’s inheritance is land/property in an area of natural beauty. If it was somewhere they spent time when they were growing up and we could keep it in the family for the next generation, that could be pretty special in our view.
But the where and what of that idea is something Jamie has been somewhat obsessively thinking about recently. Could it be part of an investment property or is it a pure vacation home. Definitely welcome any thoughts or experiences along these lines as well.
Excellent work with education without being a burden on others in society. Great leverage of education to career salary. While some may believe spending is high, you get to make that choice. As it should be. Now on to something to consider. To “help people get better access to medical care” or engage in “dog rescue”, how about thinking of the root cause? Why do we need these things. What can be done in an open market system to minimize medical care cost yet provide the best care? Should the salary of pharmaceutical professionals be paid less? Remove the middlemen/ benefits managers that provide little value? Should more education be done to prevent animal cruelty, unwanted reproduction? I’m not a fan of throwing money at problems. I am supportive of policy that gets to the root cause. Just scratching the surface and pondering…
Thanks for the comments!
I think we largely agree with your points, even working everyday in the sector it is a difficult set of systems and incentives to understand. We have some experience from single payer systems (with their own issues), but it gives some contrast to the existing structure in the US. There are far too many middlemen adding little to no value and corporate ownership of clinical practice continues an ever tightening grip on economics and medical productivity. We are still exploring where disruption can add value, whether thats in value based care and working with better models for the payers (for example, trying to incentivize preventative rather then reactive medicine in areas like ob/gyn).
If you indulge a short rant, everybody likes to look at the stats and health outcomes in the US, but the numbers are hugely skewed by several critical variables like the opioid epidemic. Which is a whole different topic of abuse and misuse on the payer, provider and patient side. One of modern medicine’s biggest issue is that the foundation is based on cheap painkillers and cheap antibiotics. From an investors perspective it is almost impossible to back efforts of innovation in either of these critical areas as the economics do not allow it. Leaving an ecosystem with massive potential for abuse.
Totally agree on the animal side, theres a lot of work that needs to be done in education and animal farming around companion animals. Would be thrilled to be able to make even a small dent just in my local community. But agree its not just a question of funding existing resources to scale, its also about attacking the problem from different angles, such as education, training, and backing people with new ideas.
Agree! Let’s all demand and support similar policy.
Well done and I enjoyed reading the dual perspectives. May I ask how you handled the large equity payout in 2020 tax wise? Was it treated as ordinary income or was there any way to reduce the tax burden?
Good question, I should have included a bit more detail there. It was treated as ordinary income, as it was mostly derived from short term capital gains.
When I was reading your interview, I realized how many themes were similar to what my wife and I are thinking about. Kids, inheritance, slow travel, home in mountains (unfortunately Jackson,WY and Telluride, CO became just too expensive:), etc.
Btw, we live in suburbs of big Midwestern city with high taxes (starts with C ends with O:) with 3 young boys (5, 3 & 1). If you guys around, would be happy to connect and share our methodology on buying vacation/rental properties (we have a few).
In any case, best of luck with boys.
Be interested in the structure around Jamie’s work? Is it a large fund and is carried interest based on normal 2/20 structure or different? And are these listed positions or unlisted positions?
Also did the PhD help directly towards analysis of these companies as a requirement or is it more financial analysis with industry knowledge?
Thanks for the article, very interesting to see the progress over the preceding decade!
Hi Charlie, its not your typical large fund or venture capital structure. It operates more like a family office and invests in mostly public and occasionally private companies. This approach has benefits and drawbacks, but part of the way it works is we earn equity in the fund, sort of like getting restricted stock units while working for a company. The result is much higher risk and somewhat higher reward than a typical annual cash bonus focused approach.
And as for Jaime’s training, the focus is probably 50% scientific diligence of healthcare companies and 50% financial and legal diligence. So still pretty heavy on the science, but its not typically in the exact area of training. For example, if you studied viral vaccines you would also be looking at cancer diagnostics, new therapies for Multiple Sclerosis, or genetic engineering for patients with rare diseases as well as vaccines. A lot of the scientific training translates well, in that you know how to read the literature and get up to speed quickly in a new area and seek out experts to learn from.
impressive – sounds like a great role that you’ve found and something unique to your particular skill set.
Congratulations on getting where you are at such a young age. You mention donor advised funds, and given the high variability of your income, DAF contributions during high income–high tax bracket years is a great way to essentially each and every year get deduction %s from your highest tax rate years.