Millionaire Interview 430, Part 2

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 July.

It’s a long one (which I love!) so I’m breaking it into two separate posts. If you missed part one, you can catch up by reading Millionaire Interview 430.

My questions are in bold italics and their responses follow in black.

NET WORTH

How did you accumulate your net worth?

Our wealth has grown in three helpful ways:

1. As a Physician I have made a very good income, at some years earning in the Top 1-2% of Americans. I realize this is a lucky place to be, but I have also worked very hard to get here.

After college, it took me 9 years to become the specialist Physician that my patients depend on for their health and lives. A good income is a reward and an incentive for young smart minds to sacrifice 9+ years of studying and learning to be the competent Physician everyone needs at some point.

2. We had a large inheritance. My wife had an older family member commit suicide with a GSW to the head.

Yes, that is graphic, but the facts should not hidden. This tragic and horrible loss for all of us had a gift at the end of my wife inheriting about $800,000.

We were shocked in many ways by the whole catastrophe and had no idea that this money existed in the Estate. It was tragic in many ways that this family member had the means to get expensive and expert help but instead did the alternative.

We vowed to use this money wisely and gave some away, and invested the large majority into our retirement and mortgage.

3. Investing and investing as much earned and unearned income as possible. Being an Investor brings me happiness and peace when I go to bed at night.

When you invest your money, you deny yourself spending on items you may not need in the first place. Compounding interest is treating us well, and being in our young 40s we have many decades ahead to benefit.

I think we will need this as stats show Millennials who are healthy may easily live into their late 80s/90s and will need that retirement compounding.

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?

I would say Earning as I recognize my great income and the luxury that my education and hard work has created. I usually earn above the Top 5% of incomes for the United States (Top5 = $335,000+).

This is hard to deny as a giant leverage to becoming wealthy.

The most important part is to be able to act on the other pillars of Saving and Investing a good portion of that high income. Like many previous millionaire writers, the three pillars of Wealth all can work together for amazing compounding.

What road bumps did you face along the way to becoming a millionaire and how did you handle them?

I have been blessed to have been born into a middle-class family that paid for my college education in full. Two major setbacks after college could have set me backwards.

I graduated with around $170,000 of medical school debt when I was done with my residency and a negative net worth (worse than broke!). The second issue was not starting to earn my career salary until I was 31 years old.

Physicians are very much behind our peers who graduate at 22 or even lawyers and dentists who are starting at 26/27 years old. We must be very intentional about our finances, which I have fully endorsed this plan and benefitted.

What are you currently doing to maintain/grow your net worth?

I am not doing anything different than stated above. Working very hard to grow my career, take care of patients well, and make as much income as I have the opportunity.

I have no plans to lower my savings rate and continue to invest. Once I feel that comfort or the burnout seeps in, I will adjust these plans.

For now, I am in a stride in my career and have many possibilities ahead of me that I would like to explore.

Do you have a target net worth you are trying to attain?

So at age 40 my wife and I were worth $4 million. I will feel accomplished when I get to $10 million and will have reached my “1 more year” pinnacle to walk away from earned income.

Is this more money than I can spend? Probably.

But I worry about Inflation, sickness, and tragedy that are unplanned. I want to be in a position to give away to others and enjoy my later years with finances as a minimal worry.

I see many older people fretting about their finances or who are completely dependent on the Government to keep their shelter and provide food on their plate. This is a motivator for me and my family to take a portion of the financial pie that is available to us.

How old were you when you made your first million and have you had any significant behavior shifts since then?

Our first $1 million was at age 36, 5 years into becoming an Attending. I fully admit that our inheritance was a large factor in boosting us.

With every million dollars adding up, I breathe a little easier and feel the pressure less and less for my family.

What personal habits and/or traits have you developed that have made you successful at growing your net worth?

I am an Enneagram 3 (the Achiever), a Type A personality, and a natural person who likes numbers. I take advantage of opportunities that come my way and I have a problem saying “no” to something that might propel me forward.

Reading articles and listening to financial podcasts has given me so much financial knowledge that I feel well equipped on what to do for conservative growth. I do not have a quick way to get money, but at this point, I don’t need that either.

Find your strengths and go with them.

What money mistakes have you made along the way that others can learn from?

We are about to embark on a big money “mistake” in the next 1-2 years with building our long-term family home. It will be probably $1.5 million and we will give up my personal peace and comfort of having a paid-off mortgage.

We are doing this as our current home is perfect for our life stage, but too small for the years ahead. We live in a HCOL neighborhood with great schools, community investment, and we have a wonderful park view/greenspace location.

A home of this cost will bring other big expenses, but when I get to age 60, and my boys are grown, and I’m hopefully worth $10mil, I don’t think I will have to worry about the sunk cost of our family home. Life isn’t all about the money in the bank, but the life money can help shape and improve your family’s experience together.

I welcome people’s opinions on what to spend on your forever family home in regard to your total net worth. For the bean counters at home, we will probably have about $1 million in down payment with a $500k mortgage.

We will sell our primary residence and transfer the equity to make this all possible.

What advice do you have for ESI Money readers on how to become wealthy?

No new tricks or tips that have not been outlined above. It is a boring formula with tried and true success. Try to earn as much as you can in your field, save 10/20/30% if you can, and invest in index and mutual funds for the decades ahead.

This will be a guarantee to grow your bank account and net worth measuring stick. Just remember to enjoy your life along the way and spoil yourself and others.

This is something I am not very good at, and have to work on being more generous and less tight with our budget.

Also, surround yourself with like-minded individuals and mentors. Befriend the people who are leaders in your field or who are earning the good incomes.

There are a lot of good habits and networking opportunities that you can yield.

FUTURE

What are your plans for the future regarding lifestyle?

Once I have millions and am a decamillionaire, which sounds absurd to say out loud, I will feel comfortable being fully in charge of my career. I may change my role in the Healthcare industry and use my experience in a different way.

10% of our USA healthcare expenditures go to Physician/NP payments, and 90% to everyone else with their hand in the pot. I think it would be interesting to explore the other 90% of the healthcare industry.

They certainly need more people with real-world experience taking care of patients.

Once I have retired and feel financially secure, my wife and I are looking forward to the big trips so many Boomers are taking now. We want to spend weeks in Europe, spend a month in Australia and drink South Island New Zealand wine, go on an African safari etc.

I look forward to joining the other old folks on the Viking Cruises and watching the European cities float by.

What are your retirement plans?

When I get close to retirement, I plan to read a ton of books and listen to podcasts on the subject. Right now I don’t want to invest too much time on that because the world changes decade to decade.

How to spend down your taxable vs nontaxable accounts and how to leave a smart inheritance are something I feel a responsibility to adhere to. As well, I plan to keep my children or grandchildren aware of how to use money wisely when the time comes.

Are there any issues in retirement that concern you? If so, how are you planning to address them?

Everyone on ESI Money says they are worried about healthcare, and they should be! Our healthcare delivery system is so screwed up, without an easy fix.

You must have a plan or big savings set aside to make sure you and your family get the healthcare in your final years that you deserve. My hot sports opinion based on what I see now, we are moving towards the English healthcare system (NHS).

There will be a national healthcare for all, such as Medicare for all. But this system will be very subpar and create bureaucratic waits and denials of basic healthcare like non-emergent surgeries, mammograms, colonoscopies, etc.

Medicare For All will be basically county hospital-level care for everyone. The government just can’t afford to keep around the system you likely enjoy today with commercial health insurance.

In England, they have the upper-tier private healthcare system that the middle class and above pay for out of pocket. We already see this in the USA with Concierge Medicine.

I am already seeing it in Pediatrics, Primary Care, Orthopedic Care, and Geriatrics having Concierge options. Soon this will be the only way to cut through the BS and get the care we used to have as a standard.

I know this is more than you asked for but it is what I am seeing as a front-line Physician in the USA.

My financial plan includes (hopefully) being able to have basic Concierge PCP care for my wife and me when we get older or have health needs.

MISCELLANEOUS

How did you learn about finances and at what age did it “click”?

I started to get serious about my adult finances as I was graduating from medical school. I had six-figure debt and a five-figure salary as a single dude.

I needed to determine how I was going to pay off my debt, save for retirement, and start to catch up on investing like my peers that had started 4 years previously. My dad works in business and did instill some investing advice and money management skills throughout my life.

I plan to teach my kids about money management as well and am starting at kindergarten with them. I welcome any money books for kids/teens that you have found effective.

I’m sure times are changing and my future teenagers won’t even have credit/debit cards, but just use Apps to pay with their phones. For now, we will stick to the Millionaire Next Door idea of not telling your children your financial numbers until they have set themselves on a self-sufficient path.

No outpatient economic care!

Who inspired you to excel in life? Who are your heroes?

My heroes are my family, my Lord, and my mentors who taught me to strive for greater. I don’t have 1 person that I look to as I have forged my own path in a way using the group wisdom.

Being able to reach this level of success is a direct multigenerational effort that I recognize and give my respect. Dad’s side were hillbillies and Mom’s side were immigrants in the 1900s from poor Europe.

Both of my grandfathers were born in houses with outhouses and farm animals running around. Each generation raised their children to seek jobs and degrees and those efforts have compounded into my success as a Physician Millionaire.

I hope I can keep the compounding with my own children, but how to do that is a challenge. It is hard to prepare your kids without pampering them too much.

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?

The same books seem to inspire all of the ESIMoney readers. I also have been propelled by:

• The Bible
• Millionaire Next Door
• Rich Dad Poor Dad
• Your Money or Your Life

I will also add that I have really enjoyed The Millionaire Mind by Thomas Stanley. This is a great book on parenting.

It discusses that the motivated kids who can only score Bs/Cs in school usually are the ones who become millionaires. The A students (aka ME) usually get management jobs and top out at $200,000/yr careers while at the same time spending their income to keep up with their peers.

The B/C students don’t get the good internships, but if they are motivated enough they learn from their entry-level jobs and start their own companies after a few years. This is how many many millionaires are created.

I will not panic if my kids aren’t earning As all the time but instead will invest in motivating them and teaching them the entrepreneurial spirit.

Do you give to charity? Why or why not? If you do, what percent of time/money do you give?

Yes, we give to many worthy causes in our life. We tithe to our Church and support an overseas missionary on a monthly basis.

We sponsor worthy causes as they come up including local projects and issues that we support. No political donations so far.

I also work as an inner-city Physician and provide a large amount of pro-bono care that is never reimbursed. Our group sees all patients whether they can pay or not, as this is the calling we have to care for those in need.

We also donate to the hospital fundraisers and other healthcare galas/drives.

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?

Currently, we have a Will and Medical Directive in place. All of our Beneficiaries are documented on any accounts we can declare.

Right now we do not have the Estate tax issue, but hope to be in that group in the future.

Yes, we will leave a large inheritance to our heirs. What that looks like remains to be seen but I anticipate we will leave much more money to our kids/grandkids than we will ever receive ourselves as inheritors of our elders.

How this will be done in a Trust is TBD. I’m feeling a little inspired recently by Die with Zero, so once I am over the accumulation stage of life, I plan to spend some of my heir’s inheritance on experiences with ME and my WIFE while we can.