Episode #289 – Doctors typically earn a lot of money. But they also tend to accumulate a lot of debt, both from years of school and from buying expensive things. Learn how the Physician on FIRE did things a little differently. Now in his early 40s, he has achieved financial independence and retired from medicine. And he spends his time traveling the world with his kids and working on projects he enjoys. He shares exactly how he built enough wealth in 8 years to reach FI, and he talks about his investment philosophy, asset allocation, and more.
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Episode Transcript
[00:00]
I finished residency in 2006 and started investing. Then 2008, things started not looking so good and market was dropping, but I kept investing. Market kept dropping, kept investing, bottomed out. In hindsight, we know now, March of 2009, big drop in the stock market is actually beneficial when you are early in your career and you have money to invest. As long as it bounces back, which it always has throughout the history of this country, it’s hard to find a time where over a more than 10 year period, you don’t come out ahead by just staying the course, investing a portion of your paycheck. Eventually, you’ll come out ahead.
[00:51]
Welcome to the podcast Real Estate Investing with Coach Carson. I’m your host, Chad Carson. You can also call me Coach. This is a show to help you build a profitable and passive rental property business so you can get out of the financial grind and do more of what matters. Whether you’re a long time listener or a first time listener, thank you for being back for another episode.
[01:08]
The title of today’s episode is a doctor’s recommendation for financial independence. This is an interview with the Physician on Fire. This week and next week are greatest hits episodes where I go back and take some of the most popular episodes from the past and republish them for you. I’m doing this for a couple of reasons. One, we’re almost to episode number 300, and there are some gems episodes in the past that maybe you haven’t heard or haven’t heard in a while. This is definitely one of them. The other reason, if you’re curious, I am out on the Camino de Sant’Ago with my family. We’re hiking an ancient pilgrimage route in Spain. You might have heard of that. We’re actually just doing part of it. We’re doing the whole thing, although I would love to do that as well. And we’re doing that as a family. I’m not going to have my podcast equipment with me to be able to record. So it was a good excuse to share an awesome episode with you. Leif Dalhain is the Physician on Fire’s real name.
[01:57]
Doctors typically earn a lot of money, as we know, but they also tend to accumulate a lot of debt, both from their years of school and also a lot of them buy expensive things, or at least that’s the stereotype. But in this interview, I want you to learn how one doctor, this is the Physician on Fire, did things a little differently. He’s going to share his story, how he did it. And he’s in his early 40s and he’s achieved financial independence and he’s retired from medicine. So he’s actually retired from being an active doctor. And I believe as I’m recording this, he is in New Zealand with his two kids and his wife. They’ve been traveling the world for the last couple of years, going to all sorts of cool places, doing the world schooling for his kids. Just lots of interesting projects. Definitely somebody you should follow along with online, on Instagram, Twitter, or on his website, which I’ll put links to all of those in the show notes. In this interview, he’s going to share exactly how he built his wealth, how he did it in eight years to reach financial independence. Then he talks about his investment philosophy, his asset allocation, and more.
[02:53]
He’s one of the smartest financial thinkers and most grounded financial thinkers I know. He’s one of those people that I feel honored to be able to reach out to and ask questions whenever I have questions. An awesome resource for you. Hope you enjoy this interview with the Physician on Fire.
[03:06]
Hey, Leif, welcome to the podcast.
[03:08]
Thanks, Chad. Good to be here. Good to see you, man.
[03:10]
Yeah, you as well. This is something I’ve been looking forward to. We chat a lot. We’re in a Mastermind group together and seeing each other off and on at different occasions. But to be able to interview you and share your story and what you’ve been through is going to be fun. I want to talk about a lot of things. I want to get into some real estate investing eventually because I know you have a different angle on that and you’ve got a different path there. And I want to talk investing strategy but,
[03:37]
I thought it’d be fun. All of us know our doctors. We have physicians. We have some physicians in the audience as well. But I’d love to go back and just talk about your career. Educate people a little bit about what is the educational path of a physician. Your website is Physician on Fire. You’re now retired as a physician, but I think it’d be fun just to show some of the journey you had to go through just to get to where you were as a physician.
[04:04]
Sure. Like you, I went to four years of undergrad. Unlike you, I didn’t play linebacker or any athletics at the University of Minnesota, which is where I went to undergrad. I stayed there for medical school, which is another four years after undergrad. I finished up with my eight years of education there at age 26. And from that point, you have decided at the end of medical school, what specialty you want to pursue in terms of what doctor you want to be. I chose to be an anesthesiologist. That was another four years of residency, which is essentially like an apprenticeship. You learn on the job with advancing responsibilities as you go through the years. So yeah, finished up at age 30, started out with basically a zero or negative net worth with some student loan debt. That’s the path. It was 12 years for me.
[05:04]
Yes, you’re about 30 years old. And just so people know as well, you took a fork in the road. I remember reading some of your history on your website that you had some opportunities to go to other schools. And I think a lot of people who get out of school, whether they’re position or other careers, student debt is a really big topic these days. How did you decide to go to the state school and go that route, which is probably cheaper than some of the other options you could have gone through instead of doing something else?
[05:30]
Yeah. I thought I was big tower back in high school. I had really good grades and scores and all of that. And I figured I might go to a top 10 school. So I applied to some of the more well known names out there. I know Duke let me in. A few others that Vanderbilt, it’s one of the good schools. Harvard said no, and that made me mad. I still hold a grudge there. But I ended up getting an offer, and the University of Minnesota had not done this before, but they had started selling license plates with the U of M logo on it. And they used the money from the proceeds to offer four full tuition scholarships. And I was one of the four people they called and said, Hey, we can let you go to school for free here. You’ll just pay your room and board. And I had a number of other scholarships, including a four year scholarship through the Bird Foundation, Robert C. Bird Center, and some other one offs. So it ended up being a fairly easy decision from a financial standpoint. And both my mom and dad and my dad’s dad had gone to that school and done well for themselves.
[06:46]
So I thought, yeah, I think I can stay home and go to the U. And it ended up being, I think, a good decision in a lot of ways, certainly financial.
[06:55]
Yeah, for sure. I had a similar different path with going to a state university or a big public university as opposed to going and then getting a football scholarship. So that paid my way. And just when you were in college, you had to go to another four years. How is medical school normally paid for? What’s the mechanism to do that?
[07:16]
Well, loans are the big way that I’d say 75 % of people pay for it. About 20 to 25 % of students come out with no debt because their parents paid for their schooling. It’s almost impossible to work your way through medical school because the hours are so demanding. It’s tough to keep down much of a job. Some people have some side gigs that they can manage, but I certainly didn’t find the time to work during medical school. So I took out some loans, but again, I stayed in the state. And this was 20 some years ago now. I started in 1998, 23 years ago. And so the tuition back then started at just under 10 grand for an in state student. I think now it’s maybe closer to 30 grand, maybe 25 if you’re in state and 50 plus if you’re out of state. So lots of loans, some of those come from the federal government. There are private loan companies, too, that help bridge the gap. And the average student finishes medical school if they have debt with over $200,000 worth of debt.
[08:26]
That’s the average.The average is over $200,000. The average. And it can be double or more. Yeah. Wow.
[08:31]
So you get out of school, you’ve gone to four years of college, four years of med school, you got a couple of hundred grand in debt, and you go through that residency period, which for you as an anesthesiologist, was four years. I’m sure there’s different time periods there, but are you making money at that point? You get an apprenticeship, do you still make a little bit of money to do that?
[08:49]
I would say similar to a public school teacher salary. So for me, it was maybe 38 to 41,000. Nowadays, it’s maybe 50 to 60,000 a year. You can get by, especially if you can put those loans in deferment or forbearance or refinance and have low payments, but you’re not getting ahead, certainly, on a resident’s salary. Right.
[09:14]
So you’re paying for your living expenses, trying to save a little bit of money, but you’re not chucking away at the 200 grand until you get out of your residency. And at that point, depending on what type of doctor you are, usually get a pretty good salary. I mean, do you know the averages for other physicians? I know it depends on your specialty, but just to give people a relative comparison there.
[09:33]
Yeah. And there are certainly lots of published figures, and some are based on a 40 hour work week, which we all tend to work more than that. And so if you see a number under 200,000, that’s probably based on someone working 40 hours. But true full time physicians are, I would say, making from the low 200 to 500 and up, depending on specialty. Primary care being on the lower end and surgical subspecialties being on the higher end.
[10:02]
I know you talk about the white coat investor, and there’s a lot of great blogs out there about financial information for physicians and other medical professionals. How would you characterize… We talked about that journey of yourself, but what’s the unique path of doctors from a financial standpoint? The joke, I had family members who were dentists and a couple of doctors as well. The joke was that doctors didn’t know how to spend their money typically. They just get into some of the bad deals locally. Obviously, there’s some generalization there, but what are some of the, I guess, the unique paths that physicians have to take from the financial standpoint?
[10:41]
Right. Well, we’ve touched on some of the uniqueness. It’s the large student loan debt combined with suddenly a very large income that might go up 5 X or 10 X literally overnight. And so on one hand, physicians are used to living a paycheck to paycheck, not a lot of money to throw around. And so you would think we’d be well prepared to start saving and paying down debt, investing, all of that. But with this delayed gratification, a lot of doctors, they get the end of the first real job with that income. And it feels good to start spending money after so long. And seeing all of your friends, maybe siblings, who didn’t take a 12 year path to their careers, already able to spend and buy homes and do these things that we haven’t been able to do. So there tends to be a lifestyle explosion in terms of… We talked about lifestyle inflation, where you spend a little more than you did last year, but if you start spending 5 X or 10 X along with your income, you’re not going to get ahead. And so one of the things that helped me is I think my wife and I, we were engaged when I finished residency, but we were pretty grounded and pretty happy with our level of spending before I finished residency.
[12:04]
And it didn’t change all that much afterwards.
[12:14]
It’s understandable, not just physicians, but anybody when you finally start making some money, you get the salary, your bank account is getting bigger and bigger every month. And that has not been happening for a long period of time. It’s understandable to say, All right, I deserve something. I made a reward here. The question is how much of that money you spend. And it sounds like I remember just knowing your story, you had some things you wanted to splurge on as well. You wanted to buy some stuff. But talk to me about some of the things you did. Fast forward eight years just to give everybody a preview of that. About eight or nine years later, you looked up and started reading Mr. Money Mustache, some of these things, realizing, Hey, wait a minute. I’m financially independent. So take me from you were in debt as a resident to eight years later, you’ve accumulated a certain amount of money. What were some of the things you did? You mentioned just being frugal and being happy with what you had with your wife. Was there anything else that you did early on that made a difference in that fork in the road that you took?
[13:17]
Well, one thing that that prevented us from even being able to spend a whole lot of money other than on trips was my first two years out after residency, I did traveling work. And so I was a fill in doc. I worked in Florida, Pennsylvania, Wisconsin, Minnesota, anywhere from a one week assignment to a nine month assignment when my wife was doing her internship as a dietitian. So I was able to save a lot of money because these hospitals and or their staffing agencies that managed our contracts basically paid for everything, paid for housing, gave me a rental car, paid for my travel to and from. Sometimes there was a per diem for meals. So my out of pocket costs were next to nothing for two full years. And that gave us enough to save up for till we wind up buying a waterfront lot, building a large home. We did have that life cell explosion a couple of years later than most people do. But I spent.
[14:27]
Intentionally, and if I didn’t have something I wanted to spend money on, I would invest it. P retty much just buying into mutual funds. Started out with a SEP IRA because I was an independent contractor. I would recommend a solo 401, which is similar but a little bit better for a couple of reasons. Then I did that and I started a taxable brokerage account and pretty much any money that didn’t have a plan, we didn’t look for ways to spend it. I looked for ways to invest it.
[14:58]
So you’re just saving a big chunk of your money. Part of that was because of your lifestyle itself, but also just some of the things you like to do that necessarily involve spending a lot of money. You mentioned setting us out in a retirement account some tax deferred account. You mentioned opening up a regular brokerage account where you can invest in similar things, but outside of your retirement account. Did you go ahead and attack the debt that you had before that? How did you approach the order of when you get some savings, what do you spend it on early on?
[15:28]
Yeah. So as far as student loan debt, the average now is 200,000. Back when I finished, it was around 100,000, and I had gone to in state public schools with scholarships throughout. So my total debt load was only 60,000. So it wasn’t a big part of my story. But I had it refinanced, or I think consolidated is the term, because it was all federal student loan debt to a very low interest rate. And so I hung on to it for six, seven years until I just got tired of making sure that money was in the checking account every month. And I paid it off with one big check. And I did that with a signing bonus that I’d gotten for taking an anesthesia job. So that was a pretty neat way to pay it off all at once. Yeah. So again, our investing was originally through retirement accounts, and then I started a taxable brokerage account. I actually was in some ways a real estate investor, but not intentionally. I had a condo that I had bought in residency, and we used it as a home base when I started traveling for anesthesia jobs. And we realized that we weren’t using it at all.
[16:46]
And so we found a tenant who stayed three or four years and another tenant after that for another three or four years. And then I sold it in the maybe 2014, 2015 range. And when I finally took my first real job, my first permanent job, I built a great, big, beautiful home. And then the hospital went bankrupt and shut down. And that was about three years later into our forever home. And so we weren’t quite ready to let go of that dream. And we rented that place out, hoping that maybe circumstances would change, or I might have an opportunity to go back. That never materialized. But we use that as a seasonal rental and a long term rental for three to four years. Neither one of those came anywhere close to meeting the 1 % rule for rental properties and weren’t really good investments per se. But there were places I felt stuck with and wasn’t ready to let go of at the time. So I don’t think those contributed a whole lot to our financial success. It was really just investing in mutual funds and keeping it simple and root for savings more than anything else.
[18:00]
Well, I do want to go back to your real estate path a little bit later on, but I love the simplicity of it. You just basically explained it in a five minute description there, but I just don’t want to lose sight of how powerful that simplicity is. That if you earn money, whether you’re a physician or anybody else who earns a more significant amount of money, the brute force method of just saving a large portion of your salary as much as you can using tax deferred accounts, being disciplined. I mean, is it as simple as that? Is that pretty much what you did? I’m just curious. That’s what.
[18:34]
I did. We did have a nice sequence of returns in my career. I finished residency in 2006 and started investing. Then 2008, things started not looking so good and market was dropping, but I kept investing. Market kept dropping, kept investing, bottomed out in hindsight, we know now, March of 2009. I just kept putting in money with every paycheck. I actually started my taxable account in 2009. I was able to buy low. That was a buying opportunity. A bear market or a big drop in the stock market is actually beneficial when you are early in your career and you have money to invest. As long as it bounces back, which it always has throughout the history of this country, then that can be a blessing. I did benefit a bit from the way the market has treated us, and it’s done quite well now over the last 10, 12 years. But most of what we have came from just what I earned and saved and set aside.
[19:45]
That dollar cost averaging, which is pretty much what you described, that I’ve heard you say this a lot on your blog, that basically, if you just keep investing, if you have a, let’s say, a five or 10 year horizon for when you want to use your money or more, it always may… A recession or a downturn is your friend. There’s no reason to panic at that point. You just keep investing, keep investing, keep investing, keep saving. Yeah.
[20:11]
You can look back over all kinds of different time frames in the past, and it’s hard to find a time where over a more than 10 year period, you don’t come out ahead by just staying the course, investing a portion of your paycheck, and eventually you’ll come out ahead. Now, as long as the stock market does what it has done over the last 100 plus years, we should be in pretty good shape.
[20:40]
And also just looking at the stock market as what it is, a lot of people think of it as these ticker symbols, but you’re just owning a piece of all the business community or whatever chunk of the business community in the United States that you want to own. The question is more about is the economy of the United States going to recover or is it not? I’ve modeled a lot of what you do and Jim Collins and other people with index funds as well. That’s my thesis is just I am going to invest in the 4,000 biggest companies in the United States. And what do I believe and do I have an investment belief that over the next 10, 20 years they’re going to be doing better and they’re going to earn money and they’re going to have good return on their investment? I don’t know. I would bet on the top 4,000 CEOs collectively making good investments. It seems like it.
[21:28]
Maybe not all of them, but you know the ones.
[21:30]
That do really well. And when you own them all, you can’t miss the high performers. And I appreciate you not using the term paper assets, which always grinds my gears when I hear that. It’s usually people who talk real estate, they say, Oh, paper assets. But these are companies that have huge factories and office buildings and retail outlets, and they provide services and create products that we all use every day. They’re not paper at all. They don’t issue paper stock certificates. That’s an old thing. Real estate, you get a piece of paper. That’s your deed. So if you want to say paper assets, maybe you should call real estate that. But I think both have their, certainly their good points. Yeah, for sure.
[22:20]
Well, yeah. So I want to get into some of the investment strategy a little bit. But back to your story, you’re saving money, you’re investing, you’re being disciplined about it. You hit the great recession, you kept investing. Talk to me about the moment when you started thinking about, Wait a minute, I’m not sure I want to keep being a position for the next 20 years. What was going on in your life that made you even think about that?
[22:42]
I was studying for a board recertification exam for American Board of Anesthesia and spending a lot of time at the library and away from my young kids and studying minutiae that didn’t really apply to what I was doing now for a living. Most of the stuff was rather esoteric, at least for my community hospital anesthesia job. And so I was a little disgruntled by that. And then I passed the exam, did pretty well. And then they said, Oh, that doesn’t matter. We’re switching to a different format. Now you’re going to take these questions annually. And never mind what you just spent all that time doing. We’re not giving you really any credit for it. Very frustrating. I was thinking, around this time before I knew they were going to switch to a new system, do I want to take this test again in 10 years? Because it’s normally every 10 years, you would have to recertify. I thought, Well, I’ll be in my late 50s by then. I wonder how much money I would need. T hat’s how I discovered Mr. Money Mustache. I had read something about him in a mainstream media article that said, Well, if you have about 25 times what you spend in a year, you’re probably good.
[24:03]
Then I took a deep dive into all the safe withdrawal rate studies from the 1990s and more recent work by different people. I added up my investment accounts and realized, Gosh, we’re spending… At this point, we had our mortgage paid off. My student loan debts were in the past. The credit card bills were five, six thousand a month. We didn’t write many checks, maybe for property taxes and a few random things like piano lessons. But I was like, Yeah, I think we spend maybe 70,000 a year and multiply that by 25. And turned out we had about that much already. And I was like, Oh, okay. This is interesting. What do I want to do in 10 years? Probably not study for another exam. And came up with a five year plan after talking with my wife to see what we might want to do with our lives if I wasn’t tied down to a job.
[24:58]
So it started off the disgruntle. I’m not in control of my time here. People are jerking me around a little bit with tests and exams, and that bothers me. And it led to examining your finances and saying, What if I had enough money? And so you did at that point, at least based on some of the calculations that people use, 25 times your annual expenses. Talk to me a little bit more about that, because I do talk a lot about a five number. I wrote about it in my book from the real estate perspective, but it’s a big part of when somebody’s starting their journey to financial independence or crossing a line where they’re trying to make a transition is making sure, do I have enough money saved up? How did you think about it when you actually started? Because you didn’t retire right at that point. So how did you think about it from your own personal investments? Yeah.
[25:47]
So there are two ways of looking at your retirement expenses, your retirement needs. One is a cash flow perspective. You can have cash coming in that equals or exceeds your expenses, and then you’re good to go as long as those income sources are steady, reliable, and in perpetuity. The other way to look at it is from a nest egg standpoint where you basically have a pile of money that you will draw from and it will grow and you’ll draw from it, but depending on what the market returns give you. And that’s more of the stocks and bonds approach. And everyone will take a bit of a hybrid approach because you’re going to have some income sources, whether it’s interest in your savings account dividends from stocks and bonds you own or social security, eventually, that thing. So there’s always going to be some cash flow and you’re going to have certainly some investments to serve as your nest egg. And I take more of the nest egg approach in general. Studies have shown that you’re very, very unlikely to run out of money over about a 30 year time frame if you start withdrawing 4 % of that initial balance, and then you can increase your annual withdrawal with inflation.
[27:03]
And so something like a 97 % success rate looking at many, many periods of 30 years over the last 100. And so if you want to be more conservative, and some people would like to. And like me, I wasn’t ready to retire right then and there. Once I figured out, I probably could. So I thought, well, if I work a few more years, we’ll have more money. Our investments will likely grow and I’ll be adding to them. And you could have a, say, a 3 % withdrawal rate if you make good money like I did and work just a little bit longer. And actually, by the time we retired, I think based on our anticipated spending, we were closer to a 2 % withdrawal rate, which made me feel like our plan was really bulletproof and that we could actually spend more than we do without jeopardizing our future in any way.
[27:56]
Yeah, love it. We threw around the number, the 4 % rule, and then also 25 times your earnings. Just for the math of that, I’m going to correct me if I’m wrong on that, but if it’s the 4 % rule, that’s 25 times your earnings. That’s just 1 divided by 0.04. Exactly, and then in your case, let’s say you had enough wealth that you could withdraw 2 %.
[28:19]
Over the end. By 0.02 %, that’s 50 X. Yeah, exactly. And really 3 % or better is pretty good 3 % is awfully conservative. And even a lot of people say 4 % is conservative because you can adjust your spending, especially if you have a little bit of a higher budget that you’re planning. We use 100,000 as our annual budget. Probably don’t spend quite that much most years. But there’s a lot of fluff there. We could certainly cut out a lot of travel. We could eat out less. We could do different things that don’t cost as much money. And so 4 % is awfully safe if you have the ability to cut back when you want to and or the ability to earn some income with different side gigs and whatever you might want to choose.
[29:09]
Especially for early retirees. And this is where you get into different life situations. I know for me personally, just having the autonomy of not having to go to a job and check in and not have to take tests when I don’t want to, that to me is like up on the top of the scale. And being able to… We’re going to talk about travel a little bit. So for me, I would rather work a part time gig or have my own business that makes even if it made 20, 30,000 bucks per year part time, that’s a huge… So when you combine that part time entrepreneurship with your nest egg, the 4 % rule, even there, becomes a lot less risky because of the flexibility you have. Still, there’s risk, of course. And to your.
[29:47]
Point, if you’re making 20, 30,000 a year, that might be a half or a third of a typical family spending. And you just lowered your nest egg requirement by that same amount as long as you’re willing to keep doing that and able to. Yeah. So a.
[30:01]
Lot of it, we’re both in the fire community, and there’s all endless debates online about how much should you have and is this safe? And who was that? Suzy Orman was like attacking the fire community for this. But the idea is working it backwards from what does your lifestyle look like and when? And then let’s add up all the finances to actually meet those needs in a conservative way. But there’s different ways to do it. You’ve taken an approach more of a I’m going to earn a high salary, save a bunch of it, invest traditionally. I started off as an entrepreneur, didn’t make as much money, but I made it earlier than you did. I just consistently made that money and invested it in real estate. So there’s so many paths. One of the reasons I wanted you to come on the show was just to show people that there’s not a formula that this is the only way to do it, or Chad did it this way, or Leif did it this way. It’s more about take some principles. If something that Leif is talking about works for you, then borrow that, apply it to you, and create your own path to financial independence.
[31:02]
I agree with that completely. I’ll also point out that you and I helped give the F ire community a bad name in some ways, not because we’re telling people anything wrong, but we do make money with our different online ventures. And we’re some of the most visible people in the F ire community. And so a lot of fingers pointed, Well, he’s not retired. He does this. Well, yeah, I know. I’m retired from medicine. That’s what I tell people. I don’t say I’m retired. It’s just I’ve chosen to do something different. And like you say, the ability to wake up when you want to and not have to be anywhere particular on any particular day, not have to meet anyone else’s standards, but your own. There’s a lot of value in that.
[31:47]
Absolutely. And work is satisfying. I enjoy projects. I would drive myself and probably the rest of my family crazy if I weren’t doing some project. Yeah. well, let’s talk about that. Let’s talk about life after five. You made a decision, and that’s a big decision. It’s big for anybody, but when you have the medical license and you’ve gone to all that school and there’s a stature to being a physician. I think that’s just in society as well, to leave that and do something different, that’s a big deal. What were some of the things, just from a practical standpoint, that you and your wife and your family looked forward to when you did have more flexibility than when you weren’t just doing that schedule as a physician? Yeah.
[32:38]
Well, you can’t really do anesthesia remotely. That’s not a work from home situation at all. And it happens at all times of day and night. Our services are needed. So it certainly opened up a lot of freedom for me to be anywhere. And pre COVID, we were traveling quite a bit. And that was our goal was to take the years from when my kids were late grade school age until high school and travel the world together at least half the year. We got to spend a couple of months in Mexico and a couple of months in Spain, and we really loved those trips. We were geared up for a cruise ship to all places. We were going to go to Shanghai, China, and then that fell apart along with other plans we had to visit. Vietnam, Cambodia, probably Australia, New Zealand, we were going to take about seven months and take a cruise ship back. But life goes on. We’re still quite happy and content. And again, I have the freedom of time. Even when we’re not traveling. And we’ve done some traveling around the US. I know you and I got together in Asheville, North Carolina, once, and things are starting to open up a little bit.
[33:56]
Again, COVID seems to be getting worse. And you mentioned physicians having a stature and maybe some level of respect. I feel like that’s dwindling. And you can see that with just the amount of distrust out there of science and authority and physicians just telling everyone to please get vaccinated. We wouldn’t recommend this if it wasn’t good for you and good for society. And yet there’s a lot of pushback and mistrust. So I don’t feel like I lost all that much in terms of my ego of being a physician and being so well respected by everyone. That’s maybe a generation removed at this point, I feel.
[34:39]
Good point. Yeah. Don’t get into medicine. Having that title is the main reason to do it or having to control over your time in life. That’s not what you do either. Well, I want to go back to the family part of it because I think we share a big part of our motivation for doing this earlier in life is just that window of time you have. And so for those listening who happen to have kids, not everybody’s doing this has kids, but I always looked at it as that’s a one time gig. If you don’t get to spend time at that point in their life, that’s gone. And so we also traveled a good bit and went to Equador for a year and a half. Kids got to go to school. I admire what you’re doing and share that desire. And you’ve taken a little bit different tack where even while you’re traveling to be more flexible, you all are even doing homeschooling or world schooling or whatever you want to call it as well, which we’ve debated back and forth. Would you mind talking a little bit about that? Just the basics of when you have a family and you’re traveling, what that looks like from a practical standpoint. Yeah.
[35:48]
So the first year we traveled, we did our own thing. My wife has headed up the schooling aspect and organized most of that. I do contribute, but she does the lion’s share of the work. And we found different online resources. Khan Academy is wonderful, KAHN. And different curriculums are out there that you can subscribe to or purchase. This second year that we did the homeschool world schooling, we had a curriculum called Bookshark, and it was provided by our school district, actually. There’s a partnership with the homeschools through our school district. And that’s a literature based set of learning modules that cover most of the core competencies is the term core curriculum. And then we do Saxon math, which is one of the more popular homeschooling math programs. And then we add our own things in some Spanish language via the Duolingo app. And it doesn’t take eight hours a day. The school day might be seven, eight hours. And my wife did some student teaching when our kids were younger, and she realized that there was maybe 60 to 90 minutes of instruction and actual school work in the school. And even a big chunk of that time might be spent waiting for other kids who might need more help or more time.
[37:17]
And you can get as much or more done at home in maybe two or three hours than kids, especially at a younger age, might get in school. Now, there’s also, of course, the socialization aspect and other things that people certainly have concerns about. And I totally get that. And we’ve met quite a few other families that are homeschooling. And my kids were in public school until they were in fourth, fifth grade. So they’ve had their share of that, too. But yeah, we really like the decision we made. And I hope we can get at least one more year of travel in when things are truly opened up post pandemic.
[38:03]
Yeah. We’ve considered doing the world schooling as well and still might. And it just gives you so much flexibility. And I love how you mentioned it’s not a permanent thing. For us, it’s been where our kids are in public school right now as well. But when you have the flexibility as parents to change things for a year or two, it can be some of the most enriching experience possible because they’re going to different locations. They’re getting to spend a lot of time with you as parents as well. I don’t know. That to me always just looked at that as an investment of time that this has such an enormous return on your relationship and on your family. So I think that’s not for everybody, right? But for those who do have that itch, it’s worth rearranging your life if you have that itch to do it. It was one of the most rewarding experiences we’ve had. We plan on doing it. We’ve delayed our plans with COVID as well, but we plan on doing some both in the United States type travel. We’ve considered going back to Washington, DC, and it’s getting Airbnb for two months and going to all the museums and doing that and going to Washington State, going to some other places.
[39:08]
So it’s a fun experience when you can do it.
[39:12]
Yeah, so many options. And again, we want our kids to go to more of a traditional high school, at least if they want that experience, we’ll make sure that they have that option. And I think your kids are of a similar or slightly younger age than ours. And so these are great years to, I think, go out and do something different. And you can always come back if it doesn’t work out. Right. Yeah. It’s not the…
[39:36]
If you’re flat out failure, we always talked about that one with Equator, we said, if this thing is just horrible, we’ll just keep moving. We’ll just keep traveling. We frustrate some of our companions when we travel because we’re like, we don’t make plans for an advance. We were making reservations for Disney this year. We’re like, What? You have to make reservations for dinner? Four months in advance? We don’t make reservations at all. We don’t ever do that. So that’s more our style. But you can do it however your style of travel is. There’s different approaches.
[40:06]
And it’s affordable. People think, Oh, my gosh. It costs five grand to go on vacation for a week. You’re going for two months. It’s like, Yeah, but a lot of that expense is getting there, getting home, and then lodging. When you stay for seven days at a time, you can get a little bit of a discount on Airbnb. When you stay for a month at a time, you might get a 50 % discount on the nightly rate. You can get a place with a kitchen and cook your own meals. You don’t necessarily need to stay right where the action is because you’ve got time. You don’t have to see all the sites in three days or seven days. You can spread it out. So maybe when we stayed in Spain, we were in through the three largest cities, Valencia, Barcelona, and Madrid, and we stayed maybe a mile from the city center and not right in the heart where the big hotels and most expensive apartments would be.
[41:01]
Flexibility of time gives you flexibility to save a little bit of money and the bargain shop. I even know people who get on the bargain flight list and to say, All right, we’re going to go somewhere for a month, and then they just look at it and say, All right, either those or those, whatever the best deals are, we’re going to go.
[41:16]
Yeah, we booked flights to Japan for next March. I hope we’ll be able to go. But it was like $200 round trip out of Chicago, which is a ways away, but we can get there. We can buy flights to Chicago. We actually booked one way flights for $97, I think it was. Wow. We might take a cruise back. I don’t know yet. Like you, we just will play it by ear. Yeah, it’s fun.
[41:39]
As a hobbyist, you’re also big into the travel rewards, so we’ve done that as well. So if you use the credit card rewards, you combine that with flexibility, long term travel. This is a game. It’s a fun game to play.
[41:52]
I’m one of those optimizers, maximizeers trying to get the most for my money and for my time and everything. It is a fun game to play. Cool. All right.
[42:04]
Well, I could talk about that for a long time. I do want to transition back. So why we’re doing this, everybody’s got their own unique path. You’ve got a family, I’ve got a family. This is a big part of our why and why we’re trying to have financial independence earlier in life. Let’s go back to the how. So the investment strategy in particular. And I always like paying attention to other people’s portfolios. And I remember an article you wrote on your website, which I’ll link in the show notes where you talked about an investor policy statement. Sounds very official. So investor policy statement. But one of the core parts that I took away from that that I started doing myself after reading that was just having an asset allocation for your entire net worth for all of your investments of just thinking about your investments and saying, all right, just upfront, how do I want to invest my money over the long run? And so I’d be happy to share some of mine as well. But if you’re willing to talk about some of just your basic investment strategy, what do you like to invest in from an investment asset allocation standpoint, and why do you choose to do that?
[43:08]
I believe my IPS calls for, and I came up with this after doing a lot of reading, reading some books and reading some blogs and figuring out, Okay, this fits my risk tolerance and my time horizon and what I like to do. I believe I’m 70 % stocks, 10 % bonds, and about 20 % real estate and alternatives. The IPS might say something a little bit different. It is a living document. You can revisit it once a year and make changes as you see fit. You don’t want to make changes every week. Otherwise, it’s worthless because this should be a guiding principle based on things you’ve learned and decided makes sense for you. And that shouldn’t change weekly. But it might change every couple of years. And for stocks, I don’t look for individual companies that I think will outperform. The people that are paid to do that usually fail to do so consistently. And so I, like you, invest in all the stocks. I think a three fund portfolio is a great way to start. And that is Total Stock Market Fund, US Fund, Total International Stock Market Fund, B ond Fund. So three funds and that will give you basically all the publicly traded stocks worth owning and something like 8,000 bonds.
[44:35]
And then you can branch out from there. I have a REIT Index Fund, real estate investment trust. And then in terms of real estate, like I said, I was an accidental landlord, no longer am. Sold both of those properties. And now I look for passive real estate investments. Started with a couple of level of companies like Fund Rise, Diversifund that just do these EREITs, which are basically private REITs. They give you a lot of information on their websites. And then I did some crowdfunding where you put in maybe $10,000, $20,000 into a particular deal, and eventually it’ll go full circle and maybe pay some money out to you as it goes. A lot of these are multifamily apartment buildings that are purchased, fixed up, rents are raised, and they’re resold. That’s a pretty common one. That could be a ground up build for multifamily. But there’s all sorts of things. There’s farmland, there’s commercial building, self storage, trailer parks. I know you and I talked a bit about some of the challenges with that thing. But yeah, I’ve done those. And more recently, I’ve been investing in real estate funds, which own a lot of those types of investments, but they own them all together, like a mutual fund, but for private real estate. So this is an area.
[46:08]
That I have not done much at all. Kind of like you’re starting, I’ve been a direct real estate investor. That’s just the path I’ve taken. I just happened to do it with a business partner. We own multi unit properties. We own single families. We own them directly. Originally, we manage them ourselves. Then we hired somebody internally to manage them. Now we outsource 95 % of the management and somebody else, and we just manage it from an asset manager standpoint. But this whole world of buying passive investments where you’re the limited partner, where you’re the money person is a whole another world. And it’s something I’m not as familiar with. And one thing I’ve dabbled in is the crowdfunding a little bit. It’s been lukewarm for me, whether I’ve done a little bit here and there. What I am more interested in, if I were not owning so much direct real estate investment, is some of the stuff you’ve done of syndications and funds. Can you just talk about… Because those are two different things. Can you just, maybe just for people who’ve never heard of those, define what the difference is between a syndication and a fund, what those instruments are? Yeah.
[47:14]
So a Syndication is when a couple of people, we’ll call them the general partners, decide that they’re going to do a big project. This would be a commercial real estate project. Commercial does include multifamily residence, like big apartment buildings. And so let’s say they need $100 million. Hopefully, they’re putting some of their own money into this. But then they’re going to look for limited partners to put in additional money. Now, the general partners will do basically all of the work for this. They’re going to line up the contractors. They’re going to get the legal things done. They’re going to find the land, find the builders, do everything. Often find the money.
[47:55]
The financing as well. There’s going to be some bank loan, right? Yeah, there will be bank.
[47:59]
Loans typically, and then you as a limited partner will look over the private placement memorandum and the proforma, which is the forms that talk about where the money is coming from, what their expected returns are, what assumptions they’re using, all of these things. And so you do need to perform some due diligence and have a little bit of a background, at least to understand what the terms are and maybe ask some questions to the general partners, like, what is their history? What success have they had? What are the potential pitfalls here? Have they really thought out all of the potential downsides? And you’re investing money and then you’ll get usually both distributions throughout the life of this investment. And then if all goes according to plan, a good payout at the end. And returns can be, I would say, somewhere in the range of 10 to 12 % to maybe closer to 20 %. And oftentimes you’ll get your preferred return, which is maybe the first 6 % or 8 %, 10 % of the money. And then you’ll start sharing in the returns with the general partner. And that might be a 20 80 or 60 40 split where you’ll get 60 % or 80 % of the returns.
[49:26]
And then the general partners get the other 20 % to 40 percent once a certain return has been met. Got it. So for you as a limited.
[49:33]
Partner on the syndication deal in particular, this is one property. So there might be a big property like the hundred million property, or it could be like one apartment complex that was $5 or $10 million. But the syndicator, this general partner, puts the deal together, and then you have either met them before or you’re on the list of the opportunities on the line. Then you then do your due diligence to decide is this one property and this manager, this general partner, somebody I want to invest in? If you do, is there usually a minimum for those types of deals that you have to have the best grand or 100 grand or something? Yeah.
[50:08]
And there’s a maximum number of investors, typically, regulations for the way a lot of these are put together limit to 99 investors. So if it’s a hundred million dollar property, well, 99 people have to average just over 100,000 a piece. So the minimum oftentimes is like you said, 50,000, 100,000 at a time. You might find a smaller project that will take maybe $25,000. But again, all your eggs are in this one basket with each of these investments. And that’s where real estate funds come into play. A lot of these funds are put together by these operators, general partners that will invest in maybe 6, 8, 10, 12 different projects like this, but with a lot more people, there’s not that 99 investor limit. And there may be a bit more of a layer of fees involved, but you’re also spreading your risk among multiple properties. Because these projects typically use leverage, like you said, a bank loan, and maybe 60 to 70 % of the funds are borrowed. And so if things don’t go well and somehow your value drops 30 % on the asset, well, you’re down to basically zero. These are risky. There’s a reason you need to be an accredited investor, and that means you have to have either a million dollars in net worth exclusive of your primary home, or be making 200,000 a year as an individual or 300,000 a year as a couple for at least two years running.
[51:52]
So there are some background checking as far as if you qualify. And the reason they do this is because you need to be able to afford to lose all of this money. And if you can’t, then you shouldn’t be investing in it. So that tells you a little bit about the potential risk. But on the other hand, the potential rewards are certainly there with strong returns possible. Right. So you’re.
[52:15]
A guy who does your due diligence. I know you’ve thought about this, but from your standpoint, when you invest $100,000 in one of these funds or these syndications, what are some of the bigger risk that you worry about that you’re looking for to avoid when you’re investing your money? I guess I would look at it from.
[52:32]
Two standpoints. There is like macro risk. Does the US economy fail? Are people who can afford to be in these, let’s say, Class B apartments going to continue to have jobs in this community? And that can be a nationwide issue, or it can be in a particular community issue. Does a big employer decide to move to a different state for more tax funding situation, leaving this apartment building half vacant? That would certainly tank your investment. And then I think there are risks at the operator level. The people that you’re working with, investing with, there are crooks out there. So it’s good to see that someone has a track record, hopefully a track record within this space or have proven themselves to be trustworthy in other fields. And if this is someone that… And gosh, this is a bit of a tangent, but there was a podcast I listened to on recent drive called a Death in Crypto Land. And it’s about a guy from Canada who had the largest crypto exchange up there, and he disappeared, well, died with a death certificate in India. But then they go back and look, and he and his business partner both had just this long history of frauds.
[53:59]
And it’s incredible that people trusted their money with this guy, where you could easily see that he’s been up to no good in all kinds of schemes in the past. And there’s a good chance this is another one of those. Hopefully, you can find out a little bit about the people you’re working with before you trust them with 50 or 100 grand. What I find so.
[54:20]
Interesting about these deals is obviously there’s opportunity. If you’re somebody who’s super busy, this is something I get from a lot of people wanting to invest in real estate. They’re like, Wow, that takes so much time. That takes a lot of effort to get going and owning direct real estate and starting your own business doing that’s not for everybody for that reason in particular. Then a lot of people are drawn to, Well, I like real estate, but I want to invest in these passive syndications. From my evaluation of it, it’s almost there’s a layer of these deals that’s exactly the same as investing directly. Just what you mentioned, the macro risk, there’s also the property risk, there’s also are you getting the right debt? What happens if you can’t refinance it? What happens if the market changes? There’s all these principles that I talk about all the time with real estate, which are pretty fundamental. They apply everywhere. But then there’s this added layer of you’re trusting your money with some operator, some general partner. I’ve often heard from other people who I’ve asked about these investments like that. That is the biggest thing you need to start with in terms of looking for red flags of digging in.
[55:19]
Have you found any, I don’t know to say, shortcuts, but just any process that you can try to evaluate the people who you meet? I just want to talk to them on the phone and see if I trust them and get referrals? I’m just curious if you’ve found a way to make yourself comfortable with the operators themselves. Yeah. My friend.
[55:36]
Peter Kim, he’s an anesthesiologist out in California, and he runs a site called Passive Income MD, and he actually teaches a course that’s all about this. It’s how to properly vet and completely understand what you’re investing in with syndications and funds. Personally, I haven’t done much in the way of syndications. I’ve gone the fund route just because I feel like it does take less due diligence because these are operators that have grown larger and are working across multiple properties. Now, obviously, you can get into trouble doing these, but I’ve worked with funds that people I know and trust have invested with for quite a long time and have had good results with. The way the largest fund I’m in works, they aim to grow the net asset value of the assets in the fund by about 3 % to 5 % a year, while distributing 6 % in a tax neutral or tax free manner. And so they’re not aiming sky high. They’re trying to give you back about 10 % returns overall. But that 6 % cash flow with no tax liability is awfully appealing. Just to go.
[56:56]
Into the weeds on that. When for no tax liability, do they use depreciation to shelter that? Is that because it’s owned by a self directed IRA or something? How does that work? It’s not within a.
[57:07]
Self directed IRA. I just own this with taxable money. But some of it is return of principle, I believe, at least it’s called that. They do use depreciation to shelter some income. And they’ve got very smart accountants that know how to work this K1 and distribute the money in a way that you shouldn’t owe much, if any, tax. Now, it does depend a little bit on the makeup of the assets in the fund. When COVID hit, they didn’t feel comfortable going in on maybe new equity deals, so they did some preferred equity, which is a debt equity hybrid, and that’s a little less tax efficient. So if the fund ended up being mostly preferred equity, we’d probably owe a little bit of tax on the distribution. But so far, I think there’s something like a 60 40 mix of equity to preferred equity. And so far, we haven’t had to pay any tax on those distributions. Yeah, that’s smart.
[58:10]
Interesting. And it goes back to one of the benefits of real estate. I mean, you’re going back to your whole portfolio, 70 % stocks, and you have that broken down between domestic and international. That’s the lion share. Lion share of what you do. And then you have this 20 %, which is in real estate and or alternative. So even all of these funds all fit within that, maybe like a 10 or 15 % of what your entire net worth is. Yeah.
[58:36]
I can afford to take risk there. I know people that go all in on these things, and that makes me a little nervous. I think diversification is a wonderful thing, both among your stocks and among your real estate and having both. And yeah, that’s my approach. Yeah, it’s actually been my approach, too.
[58:59]
And being friends with you and other people in the fire community, it’s been helpful for me to get a bigger perspective. I built my wealth through a business which was owning real estate. So it was all in 100 % for a long time. But I’ve been trying for years to diversify that between, particularly in my retirement accounts, going into stocks and so, index funds there. And I think I’m about 25 % now stocks and then about 10 % cash, which is similar to where you are. And then the rest of it is real estate and private real estate stuff. So on the opposite, you flip it around, it’s about very similar. But in the long run, I’m not set on the percentages. But 20 years from now, if I were 40, 40, or let’s see, what would that be? Maybe 40, 40 stocks in real estate, maybe 10 % alternatives, 10 %… Did I get my numbers right? Yeah, 10 % cash or something like that would be about… I’d be happy with that. So over the long run, I’m going to continue diversifying it. It’s one of the most important principles I’ve learned from you, from other people is that you don’t want all your eggs in one basket.
[01:00:08]
You don’t want it all in one market. You don’t want it all in one asset class. You’ve built this mountain of wealth. You want to preserve it. And so just spreading it out is one of the keys at this point. And one of the beautiful things.
[01:00:20]
About having financial independence and maybe even more is that you can start to take different risks. You keep that nest egg of 25 or 30 times what you’re going to spend in a sensible mix of stocks, bonds, real estate. But then you’ve got extra now, and you can take that extra and you can take bigger risks with it. You can do one of those indications where it might be 20 % or zero, and you’re not going to be devastated if it becomes zero, but you’ll become that much wealthier, able to leave that much more of a legacy if some of those risks turn out in your favor. No doubt.
[01:00:59]
Well, that’s a good segue. I want to transition to… We talked about financial independence, we talked about your journey as a physician, why you wanted to leave that profession just for personal reasons, and then how you did it with the investment portfolio, with the savings, the different asset allocations. You and I both now find ourselves, we’re in a place in our 40s and we’re not done yet. We’re still having fun doing work. You have an online business called Position on Fire. This is a business. It makes money. I have a Coach Carson business, which we both happen to enjoy this, or we wouldn’t be doing it in the first place. This is a fun, hobby lifestyle business as well, but it does make money. I wanted to talk some about your philosophy of giving. You have enough, you have enough to be financially independent. I do as well. But we still have these businesses and we enjoy making money. We like it, we do it. And so you have a philosophy on your website, your online business, which inspired me to do the same, where you give away 50 % of your profits using what’s called a donor advisor fund.
[01:02:03]
C an you talk a little bit more about that? What led you to start doing that and maybe a little bit more about what that is? Yeah.
[01:02:10]
So one of the things that was a hang up for me in deciding to leave my profession was that there’s so much more earning potential there. And even if I didn’t need the money, I could do good things with that money. I decided to make it a goal to have 10 % of our nest egg or a number equal to that set aside for future giving. And the best vehicle I found to do that with is a donor advised fund. And what that is, it’s essentially a charity that you give your money to. But then that money can be residing in an account where you can invest the money. So Vanguard Charitable, that’s a donor advised fund. Fidelity has one. Schwab has one. I have mine with both Fidelity and Vanguard, although I recommend Fidelity. I think they have the easiest one to use and you only need $5,000 to get started if you don’t want to start out with $25,000, which is what Vanguard requires. And then you can give $50 at a time from a Fidelity account, which we do stuff like that when our kids school would have a fundraiser and I didn’t want to send them around the neighborhood to sell cookies and pop corn and junk to neighbors who know we don’t need the money.
[01:03:26]
So we would just donate to the school instead. Well, here’s 50 or 100 bucks since we’re not going to sell your pop corn. Yeah, it’s great. But how it works is you donate a chunk of money. We started with, I think, a high five figure amount. We’ve done a couple of six figure donations to this donor advised fund, and you take a tax deduction for the amount that you give, assuming you itemize deductions, which you will if you give the charity. And it also helps make sure that you do benefit from all the charitable giving you’re doing that year because you’ll exceed your standard deduction by quite a bit. And then you can give that money out from the donor advised fund account whenever you want to. It can be the same year, it could be the next day, or it could be something like we’re doing, which is you treat that fund as an endowment and give maybe 4 %, 5 %, maybe 10 % since we’re still growing it, to charity each year in the form of grants from the fund. So tax deduction on the way in, tax free growth. There are some fees associated with the money there, about 0.6 % is common.
[01:04:42]
That’s pretty similar to the tax drag that you would see on that money if you kept it invested outside of a donor advised fund. And then when it’s in there, you can invest in index funds just like you would in your 401 or in a brokerage account. So we’ve seen our scroll over the years, despite giving out tens of thousands of dollars a year. I think we’re closing in on a half million in the balance in our donor advised funds. And so even following a 4 % rule, we can give away 20 grand a year. But I don’t think we need to be that conservative because the consequences of running out of money there are not as dire as they are running out of money in my own personal accounts. And so we tend to be a little more generous in that way. But yeah, I think it’s awesome that you’ve made that pledge to give out half of your profits and it’s something you can afford to do. So good on you. Yeah, you as well.
[01:05:39]
And I think it’s something I feel like a rookie sometimes, I’ve told people in this area of giving, of how am I going to make a difference? I feel like I’m an entrepreneur and I like entrepreneurship because if it’s done well, you’re helping people and you’re getting money in exchange. Obviously, there’s businesses who don’t do that. But also I think there’s a lot of society where traditional business structures don’t solve some of the problems that we think should be solved. So this has just been a, I call myself a rookie because I’m just learning a lot about how can money this donated make a difference? How could it be wasted? Where should this be helpful at? It’s just been a lot of learning for me about, particularly in my local community, affordable housing is a big one that I’m trying to learn a lot more about. A lot about transportation, infrastructure and equity with that. Those are just some of my personal things. Is there anything that you have been learning about or interested in in terms of charitable giving that’s been on your radar? Let me.
[01:06:41]
Start by just adding on one point that I didn’t make with the donor advised fund. It is the most tax advantageous, which means you can give the most for the amount of money you’re giving up by donating appreciated securities or assets funds. So if you’ve got lots of a mutual fund or a stock from 10 years ago that is quadrupled or 10 X in value, you can donate that stock to the donor advised fund. And then there are no capital gains realized by anyone, and you get the current value of that stock or fund as long as you had it for a year or more when you donate it. As far as where we like to give her money and what we’ve learned, there’s this term called effective altruism, which is looking at what will have the most impact, really, on the world and the people in it. And so that tends to be more international things like preventing cholera in third world countries, providing fresh water, ways to take care of human waste, that thing. But we also like to see money used close to home. And we do, like you donate to local causes that are helping with poverty, people that can’t pay their gas bill in the winter, local food shelves and shelters and that thing, too.
[01:08:05]
So we try to spread it around. Diversify, again, I think there’s value in diversification. So do that with our donated money as well. Very cool.
[01:08:15]
It’s just inspiring here. Half a million dollars inside of a donor advised fund. I’ve been setting some personal goals for myself as well. It’s just been a fun transition, which you’ve inspired me on to say, All right, well, how much money could I give away? And it led me past some ambivalence with my entrepreneurship here with Coach Carson. Well, I am going to turn this into a business because I would like to give away more money and I would like to make a difference in that way. So just appreciate you taking the lead on that and sharing that. And I’m going to provide a link for others who are interested in this. You have some great articles on setting up a donor advised fund. You do some comparisons between Vanguard and Fidelity. So as is the case with all of your website, it’s very detailed, excellent information. Everybody could tell just listening to you. I know on the tax strategies and the thoughtfulness on investment standpoint. I highly recommend leaf site. I’m giving you some plugs there, leaf. Thanks, man. But definitely like what you do and think people will benefit from it. Yeah, cool.
[01:09:16]
Well, my final question I always like to ask is people listening to this are going to be on various points of their journey to financial independence. That’s the common theme on this podcast is helping people get to financial independence. Do you have any final tip or final advice for people who are especially early on in their journey to financial independence? What would you give them as a parting advice? Yeah, the most important thing is to.
[01:09:40]
Grow the gap between what you spend and what you earn. Whether you do that by finding ways to spend a bit less or by earning more, it doesn’t matter if you can do both, more power to you. But if you want to reach financial independence in relatively short order, that is the most effective way. It’s not what you invest in, it’s how much you invest, how much you save. Well said.
[01:10:04]
Seems simple, not always easy to do, but that’s the formula, right? That’s it. Great. Well, really appreciate your time, Lee. Thanks for sharing. I’m going to provide links to your website and to a lot of the things we talked about today. And I look forward to connecting again, hopefully in person at some point, so we can have another beer together. I would love that.
[01:10:22]
All right. Sounds good. See you soon.
[01:10:23]
Cheers.
[01:10:24]
If you like the show, I’d like to invite you to subscribe to my free email newsletter at CoachCarson.com/REIToolKit. In addition to weekly updates. Articles, and behind the scenes tips from me, my email newsletter subscribers get my real estate investing toolkit, which includes a property closing checklist that I actually use when I buy properties, a real estate deal worksheet, a tenant screening criteria checklist, and other spreadsheets and goodies that will help you on your journey to financial independence using real estate.
[01:11:31]
You can get it all for free at CoachCarson.com/REIToolkit. I also want to take this time to thank some people behind the scenes who make this podcast possible each and every week. This includes my podcast editor, extraordinary Michael Nguyen, my amazing virtual assistant, Megan Thompson, my wife, Carrie, who helps me behind the scenes and is my partner here at Coach Carson. And of course, thank you to all of you, the listeners of this show, who make everything possible. This show exists for you. It exists because of you. And I really appreciate you being here for another episode. Everything I’ve shared with you in this episode has been for general education purposes. I’ve not considered your specific situation or risk. Before buying your own investments, be sure to consult a financial real estate and or a legal professional. Until next time, I’m Chad Carson. You could also call me Coach, and this is a show all about helping you get out of the financial grind so you can do more of What Matters. See you next time.
Show Links:
- The Donor Advised Fund
- All of the Physician on Fire’s Real Estate Investments
- You Need an Investor Policy Statement
- Physician on Fire’s 2020 Portfolio
- Physician on Fire’s Passive Income Streams
- The Best Travel & Cash Reward Credit Cards
- Find Your Next Reward Credit Card
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