Nate Reineke (00:20.734)
Hello physician moms and dads, I'm Nate Renike, certified financial planner and primary advisor.
(00:26.697)
And I'm Ben Utley, also certified financial planner and the service team leader here at Physician Family Financial Advisors. Nate, usually we have some friendly banner at the top of the show before we get to the listener questions. Do you have anything to share?
Nate Reineke (00:41.768)
You know, we didn't, I don't except for I'm right in the thick of it with like, I feel like everybody, all the families out there with young kids like mine, we're all experiencing the same thing, which is like, we're kind of getting close to like fun summer, kids are kind of getting tired of school, but not really. So we still have kind of a bit left. And I dropped my kid, my six year old off at school the last three days and he's just crying every day.
And don't know if should feel good about that, like he likes his dad, but he doesn't want to leave him, or bad about that. So that's what's been going on at my house.
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it.
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But no matter how you feel about it, it'll change before it's all over with.
Nate Reineke (01:21.672)
That's right. I had a teacher come like do, you know, well check with me. I'm like, let's see if it keeps happening. Like on Monday, he'll probably be happy that.
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I don't know how it is for you, but for me, it was like musical chairs. mean, one minute my daughter would be a mama's girl and then she'd be a daddy's girl. And then she was a mama's girl. And it's like, I just wondered like when the music stops playing, how will it end up whose chair will she be in? And I still don't, I still don't remember how it is, but yeah, I think they're closer to their mom than they are to me, but it ain't cause I didn't try. All right.
Nate Reineke (01:38.109)
Yeah.
Nate Reineke (01:48.072)
Yeah.
Nate Reineke (01:53.294)
Yeah, well, it's always fun when people apologize to me profusely when we're on video calls and they're like, I'm so sorry. I'm like, believe me, I get it. When their kids are running around acting crazy, I'm like, yeah, mine are upstairs wrestling right now. So yeah.
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Nice. And here comes the ham-handed segue. You ready? Speaking of wrestling, our listeners are wrestling with some questions, so let's get down to it.
Nate Reineke (02:12.37)
Yeah.
Nate Reineke (02:17.49)
Let's do it. Okay, first question is from an internal medicine doc in Virginia.
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Yay, internal medicine docs, thanks for keeping us healthy here in this cold and flu season.
Nate Reineke (02:25.926)
Yes, that's right. It said, I want to pay off my student loans as soon as possible so I can slow down at work and spend more time with my growing family. I have 60,000 in cash and I need 200,000 more to clear my student loans. If I get really aggressive with my student loan payments, I think I can have them paid off in three to four years. Should I invest my cash?
and use the investment returns to pay them off even faster.
Nate Reineke (03:00.221)
Yeah.
(03:00.465)
Well, that assumes that you get positive returns over the next four years, is usually been, that's been a pretty good probability in the past. But I mean, I don't know if you looked at the headlines lately, but I think all bets are off. Whether you like it or you don't like it, no matter who you voted for, I think things are changing. And I personally would not, would not invest money that I think I'm going to need in the next three or four years.
Nate Reineke (03:12.414)
Yeah, right. Yeah, I actually
Nate Reineke (03:20.936)
Yeah.
Nate Reineke (03:28.392)
That's right. That's right. Yeah. I think this comes from a good place. Like I think this, is the right goal for the right reasons, but it, it, it's sort of a short-term thinking and I guess like squirming, squirming. And I, I know this feeling because I did this, I didn't have $260,000 of loans, but compared to my income, it was pretty close to that, you know, about a hundred percent of my income. And
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Eh-heh.
Nate Reineke (03:57.518)
I squirmed and squirmed and wrestled with this and looked at budgets every day, tried to work extra, I got two jobs, I did all that. And all so that I could pay them off like one or two years faster.
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Well, in this case, you what I hear though is like, I'm to work really, really, really hard for the next four years so I can spend more time with my family. having experiences, having kids that are in their early twenties, I can tell you that the further you go, the less valuable that time is with your kids. Their values are formed by the time they're age six or seven. And so if your kids are two and you spend four years at work and you're not seeing them, then
Nate Reineke (04:32.936)
Mm-hmm.
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Those values are formed by the time you show back up on the scene, right? So you said this before on the show, don't be in such a hurry. mean, like, what is the big hurry to pay off the student loans? Right? I mean, I know the juice is running, right? But if you think about the six or 7 % interest rate, I guess, that student loans are running out these days. And you compare that to the compound effects of spending time with your kids, right? mean, time with your kids is paying like 25 or 50 % interest.
Nate Reineke (04:45.544)
Hmm.
Nate Reineke (04:52.734)
Yeah.
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like real human interest in attention. And in my mid fifties, you know, I'm looking back on my life and I'm thinking, how did I do? And I'm not looking at my bank balance. I'm looking at the relationship that I have with my children and the rest of my family. And you know, I feel like I have the things that money can't buy because I did pay for them, but I paid with attention. And so when I hear this, makes me sad because I...
You know, I'd give my right finger to be able to go back and spend one more day changing diapers and squeezing feet, poking out of onesies, right? And this listener is going to miss that because they're in a hell fire hurry to pay off their student loans.
Nate Reineke (05:44.787)
Mm-hmm.
Nate Reineke (05:51.9)
Yeah. Well, luckily for them, I hope they're not going to miss that because I'm talking to them a lot. So, but yeah, that that's exactly the experience that I went through. I was just lucky enough to go through this turmoil before children, but doctors generally aren't. You know, I'm not a doctor. I didn't go to school as many years. So by the time I had my student loan staring at me, I was 22.
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Yeah, good, good.
Nate Reineke (06:20.222)
You know, so for physicians, just get the best way to do this is to not forget about student loans, not care about them, but integrate them with your plan and pay them off in a reasonable amount of time. You know, a lot of work left, a lot of life left, one step at a time.
(06:37.713)
Yeah. Folks, our mission here, this is like, we have a written leadership statement. We talk about this every time we have a team huddle on Tuesday mornings at 10 Pacific. We always begin that with our mission. And our mission is to help the people who work here at Physician Family become better versions of themselves while we help the physician families we serve retire without regrets. And if you're spending too much time at work and you can strike the balance any way you want to.
But you're spending too much time at work or you're spending time at work when you should be spending that particular unit of time at home during a critical time, you will have regrets later in life. You will retire with regrets. So yeah, we're financial people. Yes, Kyle's our investment guy and we do very much care about the bottom line. We're not insensitive to interest payments, but I have, I have friends. I have friends who are doctors.
You know, I know folks that are docs who did not invest in their family at the appropriate time and they do have real regrets. And so if you'll listen to us, that won't be you, but it ain't all about money. It's about life.
Nate Reineke (07:48.632)
All right, next question comes from a double doctor family in Illinois. We're on track with our financial plans and still have extra money. Should we consider diversifying even more beyond the index funds we buy every month? We are thinking about an investment property or REITs.
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Wow, I just got off my soapbox.
Nate Reineke (08:13.98)
Yeah, get back on. No?
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No, no, no. mean, no, generally no. I mean, let's think about this. Let's, let's, take this off. So, some folks have heard about Warren Buffett. Others have not heard about him. He's like the, wealthiest self-made, person in America. And he started investing in stocks when he was a kid. Right. And so.
Uh, his company, Berkshire Hathaway also buys the stocks of publicly traded company, famously, uh, Coca-Cola, believe they also own Apple and some other companies like that. But you know, I looked one time, I, I, somebody asked me, should I invest in real estate? And was like, what do the rich people do? What are the people who've got money do? And so I was like, okay, Warren Buffett, he's, he's kind of a guy that some folks idolize. I'll look and see what he does. Well, uh, yeah, he owns a company called Berkshire Hathaway real estate.
But it's a real estate agency. They broker real estate. So he's not invested in real estate. He's not owning a whole bunch of properties and he's not doing the Blackstone thing where he goes up and buys chunks of neighborhoods. All of his money essentially is invested in stocks, mostly US stocks and bonds. Inside Berkshire Hathaway, they have something on the order, $300 billion invested in US treasuries. Right? So one of the richest people in the world invests exclusively
in stocks and bonds outside the very modest home that he holds in Omaha, not super far from Illinois. If they can do it, you can do it. And I mean, these days investing in US stocks is just damn near free. I mean, I think I looked and it was the rate on one of the Vanguard index funds is like three basis points, 0.03%. And I think that's like 30 bucks on a hundred thousand dollars a year, right? So.
Nate Reineke (10:05.63)
Mm-hmm.
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It's cheap, it's almost free, it's super easy to do this. I think because it's so easy, a lot of docs are like, it's gotta be more complicated than this. But the fact is, it doesn't have to be more complicated than that. Ever.
Nate Reineke (10:19.518)
You know, what's interesting to me is that this question comes up when people have extra money a lot. Like, I'm comfortable with stocks and bonds, but now that I got real money, I want to make real investments. Like, what is, what is that? If it's good enough to retire, retire you from work and send your kids to college, why isn't it good enough for your extra money? And I don't really know where that comes from. It's just, maybe it feels like, I don't know, casino money.
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Mm-hmm.
Nate Reineke (10:49.266)
But I wouldn't want to-
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Or maybe it's, you know, I've told my kids, said, look, if you go to school, you go to high school and get good grades, and then you go to college, you get your undergraduate degree and you get good grades, and then you go to graduate school and you get your degree and get good grades, and you keep going like that, you're gonna become one of two things, a college professor or a doctor, right? I think this is in the physician's psyche that there's always something next. I've conquered this, so I gotta move on to something else.
Of course, there's hot tub banter where you're talking to your buddies about what you're investing in and what they're investing in. And there's a little one-upsmanship that goes there. Right. Because let's face it, if they're on track and they've got all this extra money, they could accelerate that and change their family tree, you know, but it's not necessary for them to do cartwheels when they're finishing the finish line. So I'll give you an example. spoke with a client yesterday, someone who's relatively new to us.
Nate Reineke (11:19.006)
(11:42.217)
And we're talking about what to do with their portfolio and we're looking at reshaping it. was like, taxable account. I see you've got some gains here. said, do you have any losses to carry forward? And the guy kind of hung his head and he's like, yeah, I do. I got cute. And I was like, what does that mean? And he says, well, I've got a couple hundred thousand dollars worth of loss carry forwards from some non-traditional investments that I made. He said, I learned my lesson. I thought, I wish everybody could hear this. I wish everybody could hear that.
Nate Reineke (12:07.838)
I
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I mean, it's modern investment, just literally vanished, right? And so has a tax loss carry forward. And guess what he's going to use that loss carry forward to offset? Gains in ordinary mutual funds, right? So, I mean, it's not hard. It is not hard. And because it is easy, so many people want to complicate it, but it's not. You sometimes the simplest thing to do is the thing to do.
Nate Reineke (12:22.696)
Yeah.
Nate Reineke (12:37.296)
Okay, all right, this one should be less soapboxy. Emergency medicine doctor in Georgia. We switched over to a high deductible health plan so I can open an HSA now. I was told I can open one with whomever I choose and will fund it myself. Any specific recommendations on which company I should open it through.
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Stepping down from the soapbox.
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Good. I'm tired.
Nate Reineke (13:04.166)
So most people don't know this because when you have a high deductible health plan, usually it's attached to an HSA that you can do through your paycheck at work. And so it just comes with HSA Bank or whoever your work chose, and they're usually pretty reasonable. But if your work doesn't offer one, you can just go open up an HSA. Anywhere, yeah.
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Anywhere. I think the assumption here is that I have to do it work because my 401k is at work and I can't just do my 401k anywhere I want to. But the difference between an HSA and a 401k is there's no restrictions on HSAs. You can take money out of them anytime you like. And as a result, you can move them around anywhere you want to, which also means you can start them anywhere you want to.
Nate Reineke (13:38.664)
Mm-hmm.
Nate Reineke (13:50.622)
Mm-hmm.
Mm-hmm.
(13:54.946)
Yeah. So, I think we have, we have been through, not less than four different HSA providers as a company, trying to figure out how to get this right over the past eight years or so. ultimately, we found out the fidelity, they launched a no fee health savings account. So we put money at fidelity. I've had one there. it was a pretty good experience, but it's still as a brokerage account. you know, the HSA money goes in there.
Nate Reineke (14:10.792)
Mm-hmm.
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And once it goes in, you have to place a trade to invest it. Right. And Fidelity's got pretty good lineups. mean, I'm comfortable with it, but the downside really is not that it's Fidelity, but that it's a brokerage account. you know, brokerage accounts, money goes in, they didn't have to tell the money what to do. And if you're contributing to it on a monthly basis and that's, know, you can automate it, but it's not easy. Okay. Um, you know, we have United healthcare at the, at the company and they have Optum. And so, you know, I have an Optum health savings account.
The cool thing about that is when the company puts money into it, it goes to work immediately. Right. So that's, that's easy peasy. Uh, you know, uh, I have used lively recently for a small contribution. Uh, the process of opening the account was super easy is everything was really slick. And I learned about that from a client who was using lively. Um, it kind of, it kind of depends on if your employer is making regular contributions to health savings account at work.
You probably would want to look there first because it's going to be convenient. And if you have extra money to put in, let's say they're putting in a thousand dollars a year and you want to put in another, you know, three, five, six, seven, $8,000, then that's probably your best bet. the investments may not be perfect, but being invested in a less than perfect investment is better than not being invested at all. Right. So I would look more at convenience first. And then, you know, if you have a big.
Nate Reineke (15:47.934)
That's right. Yeah.
(15:53.354)
a big account with maybe $100,000 in it, then transfer the lion's share of that to someplace where it is going to be very efficiently invested.
Nate Reineke (16:02.002)
Yeah, and that Fidelity account has really low fees and all that. it really is just, yeah, no fees. It really is just convenience versus kind of the more perfect investing. But I don't, I actually see quite a few people leave HSAs uninvested, which is why we're saying this. like, once again, we do care about how good your investments are and the fees, but
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No fees. Yeah. Yeah.
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Mm-hmm.
Nate Reineke (16:29.886)
more important than that is that you're actually invested. yeah, makes sense.
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And more important than that is don't spend your HSA. We'll just say it again as a public service announcement, don't spend your health savings account.
Nate Reineke (16:38.856)
That's right. That's right. That's right. For retirement. All right. The last question comes from every doctor across the country. Then I think I've gotten this question 10 times the last two weeks. Okay. So yes, every doctor wants to know how much do most doctors spend and how much do they save?
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Okay, every physician said.
Nate Reineke (17:10.238)
I'm writing plans left and right these days, And I think at least 50 % of the time someone says, I don't know, how much do most people spend? Oh, is that too much? Are we crazy spenders? But what's funny is they do usually spend in a similar range. So I don't feel like it takes away to just tell them. But at the end, so I'm going to tell everyone. They'll start with that. And this is highly dependent on you. Like you have kids.
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Mm-hmm.
Nate Reineke (17:38.526)
depending on where you live in the country, depending on how old your kids are, like how big your mortgage is. So the range pre-retirement, it's a big range because highly different, but usually it's like 10,000 to 30,000.
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Yeah. And give us a range, give us a range too, so that we can, we can.
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Yes, that's 30 is exactly the number. It's 30 is like the high that I've seen. Yeah. So that's high cost of living area. That's a big house. That's kids going to private school. That's, you know, high end vacations, maybe a couple of times a year. Right. And then I've seen as low as seven, which is no kids living in Missouri. Yeah.
Nate Reineke (18:02.098)
Yeah. And it's in the. That's right.
Nate Reineke (18:16.638)
Yeah.
Nate Reineke (18:21.66)
Yeah, I did a plan like that the other day. Yeah, and I wanted to just say for the people spending usually like low 20s, normally they feel really guilty about it. And you are not alone. It is usually an expensive time of life, a childcare time of life. Just bought a house and interest rates weren't that great time of life. And when you really break it down, you're spending most of time when I see people spending in the mid 20s.
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Mm-hmm.
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Yep.
Nate Reineke (18:51.582)
in retirement usually land around the average because paid off your mortgage, kids are out of the house, more disability insurance payments. And so the average that we have seen for years is 10,000 to 15,000 in retirement.
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Yep. Yep. Yeah, keep seeing that number.
Nate Reineke (19:10.11)
It's a number that seems to just not make sense with inflation, but I've dug into these numbers hundreds of times and it's always 10 to 15.
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Well, yesterday I was on a call with Chelsea and we were working over someone's retirement plan and I was just drilling down in it to see what's going on. And the figure they were targeting was $14,000 in retirement. And I thought that's nice and round. And Chelsea said, we actually did a spending organizer to get to that number. So I knew it was solid, there, you know, we've, there are not less than three different ways to arrive at the amount of money that a physician spends. Okay. So there's direct observation, which is to get your
credit card statements and your bank statements and see how much money you actually spent. Okay. There's pro forma, which is to kind of figure out what your house payment is and what your other payments are and fill out an organizer to kind of come up with the total. And then we've actually had clients where we've gone both ways to see if there's a reconciliation between those to see how close they are. And then there's spit ball on which is to say, you know, most physicians spend 10 to 15,000. You live in a high cost living area. So maybe you're on the higher end of that, you know.
Nate Reineke (19:51.038)
Mm-hmm.
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The interesting thing is that if we do it pro forma and I give them a sheet that has 10 different categories on it and they write in numbers, if I add a category, an 11th category, they'll write in another number. So they're just, they're literally spending more on paper just because I added another category. So that tells you how sensitive this exercise is. You know, but at the end of the day, it doesn't matter how much you spend, it's how much you save.
Nate Reineke (20:30.3)
Yeah.
(20:44.765)
that makes a difference. And if you're saving enough to be able to pay for yourself in the future, then you you can't spend that money. You need to provide for yourself now and in the future. But no matter what, somebody spending like 8,000 a month versus $25,000 a month, they all feel guilty.
Nate Reineke (20:51.742)
That's right.
Nate Reineke (21:01.278)
They all feel guilty. I just met with a family that spends $6,000 a month and they asked me if they could buy a house. I'm like, oh my gosh, yes.
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Have you, have you, and this is a legit question, have you employed here at Physician Family, have you ever worked with a family that said, in any way, I feel good about how much we spend?
Nate Reineke (21:19.208)
Mm-hmm.
(21:35.962)
Long silence for a podcast. Yeah.
Nate Reineke (21:38.024)
Probably not. Probably not. I think that they say things like, I think we do okay, but they're still wondering. And those are the people who spend peanuts. I think we're doing okay. Like that sounds to me like maybe we could spend more. So, you know, there's always guilt with spending. It's really funny to me because when I really go deep into spending,
(21:51.409)
Yeah. Yeah.
Nate Reineke (22:07.312)
Everyone wants to cut their grocery budget in half. Like really? That's where we're starting? Food? Like groceries?
(22:12.913)
Yeah. The fastest way to demoralize the troops is to cut their rations. That's horrible leadership. And if you're fighting a war or a financial battle. Yeah. So.
Nate Reineke (22:17.257)
That's right.
Nate Reineke (22:23.196)
Yeah, yeah. And so I'm like, we don't touch the grocery budget. But, you know, like you said, you can make a plan for any amount of spending. Now, where the guardrails are is your ability to save. So everyone wants to know how much does everyone save? The short answer is very few physicians save enough to retire really early. Very few, no matter how much they make.
(22:27.356)
Yeah.
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Yeah, no matter how much they make, very few. Yeah, we're talking to like high six, low seven figures of earnings to be able to retire early is what we typically see. But the funny thing about it is those folks tend to be specialists who absolutely love what they do and they never want to retire.
Nate Reineke (23:06.206)
And I've seen, they have to make a lot and spend like they're not a specialist. And then usually it can work out. usually folks don't save enough to retire really early. Generally what I see right out of the gate is everyone's doing the easy stuff. They're filling up their 401ks, maybe an HSA, maybe, but usually spending it. And if I'm lucky, they're doing IRAs too.
And that's possible if you to retire off that if you spend very little But you know for the average person. It's not enough to spend $10,000 a month
(23:48.383)
Yep. All right, so with that, I'm gonna take us out. So if you're listening to this show and you have a friend, it's probably not you, but you have a friend who's got cash filing up in their checking account and their tax person doesn't seem to have a clue about how to them save taxes. And they're wondering how much they can really save. They wanna feel good about saving so they can feel great about spending. That friend, you should send that friend to us.
Nate Reineke (23:50.27)
That's how much people spend it. All right.
(24:16.422)
As that friend just happens to be you, it's okay to raise your hand, go to physicianfamily.com, click that get started button. We can chat, we see how things go. We can look at the website. You can see all of our prices fully disclosed as if we're selling canned goods. It's just crazy that you know what it costs. It's pretty reasonable. Go to physicianfamily.com and check that out. If you're not ready to start a relationship, go to physicianfamily.com forward slash quiz and take the retirement wellness check. Until next time.
Remember, you're not just making a living, you're making a life.
