ļ»æPhysician Family Podcast-PYP-21-0527-Fire
[00:00:00] Ben: [00:00:00] Welcome to the physician family podcast, where we turn today's worries about money into a comfortable feeling of financial security to last you and your family. A lifetime I'm Ben and I'm
[00:00:14] Nate: [00:00:14] Nate Renegade. Today's question is physician retirement. Should doctors set themselves on fire and in our world, uh, fire stands for financial independence retire early.
[00:00:28] Which is an approach that many doctors are taking to work in retirement preparation. And, uh, today we're considering, uh, the question of whether or not they should do that. So, uh, Ben, it, you've been listening to physicians talk about and ask you about fire for years now. Uh, so you know, a lot about it. Uh, some of our listeners might be hearing about it for the first time today.
[00:00:54] So could you start by just telling us maybe the beginning part of the fire, the FII, what is financial [00:01:00] independence?
[00:01:01] Ben: [00:01:01] So funny independence, uh, is that, that feeling of being able to, uh, know that you're financially secure because you have enough money coming in and, and not from paid employment. So the fire F I R E stands for financial independence retire early, and fire is a movement.
[00:01:24] Uh, not among physicians, particularly, but among individuals that, uh, has its roots in a book that was written by a stockbroker back in 1992. And the name of that book is your money or your life. And in the book, he equates money to being a store of life energy, and he equates financial independence as the ability to choose how you use your time and or your life energy to, to the purpose that you have in life.
[00:01:54] So, uh, then what is, what is R E what is retire early? So, [00:02:00] uh, retire early. Of course it's a relative term. And I guess it means, uh, any date before 65. When I hear physicians talk about early retirement, they're typically talking about age 55 or perhaps even earlier than that. And I think, uh, I seen some references to physicians retiring when they're, they're in their forties, as, as retiring early.
[00:02:23] Nate: [00:02:23] So retiring in your forties as a physician, um, is, is very early, right? Because they, they usually physicians get out of residency in their early thirties, thirties. Yeah. Yeah. So that's, that's working for less than 10 years, right?
[00:02:41] Ben: [00:02:41] Right. Um, which is strange to me because, you know, if you're able to work less than 10 years.
[00:02:47] So let's say that you finish your training, go into practice in your mid thirties, and then you, uh, quote unquote retire early in your mid forties. Well, that means that you had 10 years of really high earnings. [00:03:00] And really high savings, which is interesting because the way that physicians get really higher earnings is to work, uh, work in a field that is a deep sub-specialty with high reimburse.
[00:03:11] And it's, it's unusual. We'll just see a person who is willing to dedicate so many years of their life to that level of training only to come out and, and do that thing for eight to 10 years.
[00:03:28] Nate: [00:03:28] yeah. So it's, I mean, Uh, as I was looking into fire and reading more about it, um, it seems like it's a pretty extreme approach, but with just like anything in life that, you know, extremes come with, you know, negatives and positives, I guess. So what are some of the good things about fire? And then we could talk about some of the bad things about fires.
[00:03:50] So is there anything good about, about this approach?
[00:03:53] Ben: [00:03:53] Yeah, I think, I think there, there is, uh, some good stuff about it, but, you know, as I, as I, [00:04:00] uh, before we did the show, I re-read, uh, much of the, of what was in the, your money, your life book, which, uh, coincidentally I read back in 1994, I found it on the. Uh, on the bookshelf in a bed and breakfast that I stayed at in Juneau, Alaska, where we had our honeymoon.
[00:04:16] And, uh, you'd think I have better things to do than pick up a book, but I, uh, I picked it up and read through it and made a lot of sense to me. So, uh, I would say that the good thing about fire is just the fi part of fires. It's the first half. So. The good thing about fire is the, uh, the thinking around financial independence and the great thing about being financially independent is it gives you the freedom to do what you want to do.
[00:04:45] And that may mean working for money, or it may mean working. Not for money. So for example, you know, if I'm a doc, I may want to practice in my field, but maybe I'm not comfortable with some of the ethical things that happened in my field, or [00:05:00] maybe I'm not comfortable with the pace of work or the pressure that goes with my field.
[00:05:04] Or, uh, maybe I want to practice just exactly my way, uh, you know, by myself or with a group of other people. And perhaps that is not as profitable or as lucrative as. Uh, practicing, you know, in the, in the mainstream or, uh, you know, in a, in a, in a typical setting of a for-profit setting. So, you know, maybe I achieve financial independence, which is the ability to cover my bills.
[00:05:28] And, uh, then I, I move on and I do what I want to do. And maybe I'm still employed, you know, maybe I'm still working for money, but in that I'm, I'm doing more of what I want to do. And money is not the primary motivation for that, for that employment. It's the work. The thing that gives my life purpose is the motivation and the financial independence is the thing that just gives me permission to, to pursue that.
[00:05:53] So I think I answered the what's good about fire.
[00:05:57] Nate: [00:05:57] Yeah. Right. W F I is good [00:06:00] about fire. So it does that mean Ari's bad retire early?
[00:06:04] Ben: [00:06:04] Um, I think, I think retiring early for physicians. Is, uh, it is a bad thing for a certain group of people. So, uh, in which is a roundabout way of saying, I think retiring early is, is a good thing for a certain group of people.
[00:06:25] And specifically I've seen physicians who got into medicine for the wrong reason, a wrong reason being, uh, my mom really wanted me to be a doctor. You know, my dad was a doctor and I felt pressured to be a doctor. Uh, another bad reason to be in medicine is for the money. Uh, you know, I think, uh, so I always have a joke when people say, oh, you, you work with, uh, doctors and dentists, right?
[00:06:53] And I say, well, actually we just work with allopathic, attending medical doctors and doctors of osteopathy. And they say, what's [00:07:00] the difference between that and a dentist? And I said, well, let me ask you a question. Uh, Have, uh, what do you call a guy who went to med school for the money and they never come up with the answer and I'll say a dentist, you know, cause the dentist I've spoken with are all about retirement and you know, getting out of their job and money, money, money.
[00:07:17] And, uh, I'm sure that's not all dentists, but it just happens to be the ones that I bumped into. Uh, they can't wait to stop practicing. So most of the docs that I know really love medicine, uh, maybe they don't like the burden of, you know, having the, the pace at which they practice the things that lead to burnout, uh, some of the emotional issues or, uh, maybe the new EMR is something that they hate, but the act of serving people, the act of helping people be better is something that the good docs really enjoy.
[00:07:47] And, uh, so I would say that retiring early is for people who. Got into it for the wrong reason or, um, retirement early would be for people who thought they wanted to be a [00:08:00] doctor, got into the field, started practicing and thought. Oh, my gosh, this is really not for me. This is, this is more pressure than I thought it was going to be, or this is, uh, this is entirely different than what I had imagined or what I was promised.
[00:08:16] Uh, you know, I didn't realize that being in the ER was going to be such a, a head slam every day and I just can't hack this and I want out, so for those folks, I think that retiring early is, is a good thing.
[00:08:30] Nate: [00:08:30] Yeah, it reminds me of, um, We serve a physician here and we're in Oregon. And, uh, she talks a lot about how the administration side of being a physician has gotten unbearable and she, uh, loved being a doctor for all the years that you've known her.
[00:08:49] I dunno, I think you've served her for 20 years and now she, um, is completely financially independent and still hasn't stopped practicing, but works on her own time and on [00:09:00] exactly what she wants to do. That's what it reminds me of.
[00:09:03] Ben: [00:09:03] Right. Yeah. Yeah. I think that that's the, that's the, the FII side of things F I gives you the options that you need.
[00:09:11] It gives you the freedom to do what you want to do. Uh, and it also gives you the security of knowing that yeah, I've got an income. So if this other thing that I'm doing, uh, doesn't pay or it doesn't work out, you know, I'm still going to be good.
[00:09:24] Nate: [00:09:24] Mm. Yeah. It, it makes me think that there are. Uh, there are physicians that it does make sense for them to do fire.
[00:09:34] And the, the kind of nuanced side of this question is how fast, because for some physicians, it makes a lot of sense for them to sprint to this goal. And for others, you know, they should approach this with, uh, intention, but, uh, it, financial independence early on may not be. [00:10:00] The most meaningful life they can live.
[00:10:03] That's that's um, that kinda doesn't sit well with me when somebody who loves practicing and has a family and they still, uh, uh, you know, I've in my experience, talking to physicians, they feel some shame about how quickly they're getting to this milestone of financial independence. Right. Right. And
[00:10:22] Ben: [00:10:22] have you seen, when you say, feel shame, do you mean like they're getting to it too fast or getting to it too slow?
[00:10:28] They're
[00:10:28] Nate: [00:10:28] getting to it too slow in, or what they think is too slow. They're getting to financial independence too slowly, their friends or the people they're reading people they're talking to, um, are saying that, you know, you should, it shouldn't take you until you're 50 to be financially
[00:10:44] Ben: [00:10:44] independent. You know, I think that there's some confusion around the site.
[00:10:48] To me, financial independence is different than getting rich and getting richer is different than getting retired. So, um, It's very easy for a [00:11:00] physician to look at their colleagues who started saving 10 years before they did and say I'm behind for retirement. Nevermind. The fact that they're going to make twice to 10 times what some of their friends are making.
[00:11:10] Right. But financial independence doesn't have anything to do with being rich. It has everything to do with a ratio of expenses. Two assets, which is to say how much you spend versus how much you have, and, and those assets ability to make money for you, whether that's, you know, passive income, which you hear a lot about, or whether it is, uh, you know, capital return, like it might get in stocks or something like that, or, or even growth of a business or growth of real estate.
[00:11:38] So, um, you know, if they're looking around and they're comparing themselves to their, to their buddies, you have to look not only at like how much money do I have. And how long have I been saving? You have to look at like, what, what do I have in my life? You know, how does my life look compared to that person?
[00:11:55] I mean, maybe that guy went out and sold stuff and got rich selling things [00:12:00] or developed a startup. Well, if I'm that physician, I would want to look at my life and evaluate this and say, what am I doing? You know, when this life is over with, what, what difference did I make in people's lives? Did I. Did I create a piece of software or did I save, you know, a thousand people from dying of cancer extending their life for 20 years?
[00:12:18] You know, the, the person who touched my father 20 years ago said, Hey, you're in your fifties. We're just going to see if we can tack on another 20 years of your life. And they did that and it, and it has meant everything to him. So it's, it's not just how much you have. It's like, what are you doing with what you have
[00:12:36] Nate: [00:12:36] for those people who, um, Really find meaning and purpose from their work.
[00:12:44] How should they approach financial independence? Is this something that they should even care about? Well,
[00:12:50] Ben: [00:12:50] so should they even care about, um, should, is a big, is a big word? Uh, I wouldn't want anyone to shit on themselves. Uh, [00:13:00] but here's what I can say. Uh, there is. There is some comfort comfort. There is a, a good feeling in knowing that the financial aspect of your life is under control or in check or working.
[00:13:16] It's like you wake up in the morning and if your marriage is Rocky, maybe you don't feel good about that. Or if you wake up in the morning, your relationship with your kids is rough. That's not a good feeling. And people have a relationship with money as well. So if my relationship with money is not good, then what I do to, to.
[00:13:33] To improve that, you know, how do I, how do I work on it? And one way to improve that is to pursue financial independence because in the pursuit of financial independence, you, you can be, you can get with the idea that, that money. Is not just something you buy things with money is a store of life. Energy.
[00:13:52] You go to work, you make a hundred dollars an hour. You bring that a hundred dollars home. You have spent one hour of your life that you're never going to get back [00:14:00] for a hundred dollars. So, um, and you can take that a hundred dollars and turn around and buy five hours of someone else's time at $20 an hour.
[00:14:09] So it is a store of life, energy. Uh, and I think that that is the, that's the good thing about financial independence. And that is if there is a should in this it's physicians should pursue financial independence just to learn about that interplay of the value of time and the value of money. And I would say that in the hundreds of physicians that I have served over the years, The one thing that I would like to instill in them is the value of their time.
[00:14:39] I see physicians, uh, wasting time doing things that are, are far beneath them. Uh, not to mention some, some of those things being my job, uh, In not using that time in a way that would benefit themselves and their families and their communities. And I think that FII financial independence kind of links the money together with the time.
[00:15:00] [00:15:00] And, uh, it teaches them to think about money in the way that, that, uh, someone does, who does value their time. Hmm.
[00:15:09] Nate: [00:15:09] That's interesting. And I, I think that is true. Some S uh, that. That it does link time and, and, and money, but the issue I have within maybe I'm playing devil's advocate a little bit here, because I do think, I mean, with our jobs, we of course want people to be financially independent.
[00:15:32] Um, but there's a part of me that sees people sprint so fast at this, that I kind of think at what cost. All right. How much is it costing them to become financially independent that fast? You know, I, I read, I read recently that it, on average it might take 15 years. Uh, of, and the words I read were living like a resident and working overtime for 15 years can get you to financial independence, [00:16:00] I mean, 15 years.
[00:16:01] And so you're 33 and you probably are about to have some kids. And I have two young kids upstairs right now. Yeah. And I just can't imagine working a hundred hours a week for this magical financial independence so that my kids could leave my house and, you know, early retirement. Yeah. Yeah. Nice early return.
[00:16:23] Ben: [00:16:23] Well, I, you know, so let's look at, I mean, 15 years is, uh, is about the, the life span of a child. Who's going to be living at home. And I can make an argument that the, the useful life span of that is less because, you know, when they're, when they're babies, you know, you, you get to spend some time with them and the older they get, the less time you spend.
[00:16:42] And then when they get to be in their teenage years, particularly in high school, you, they don't see them anymore because they're so busy or they don't want to see you anymore. Cause they're teenagers. Right. Again, I think financial independence is perfectly fine. You know, I'm making that a goal because really, you know, true financial dependence is actually pretty easy to get, [00:17:00] uh, you know, physicians earn enough.
[00:17:01] They can save enough to be able to, uh, cover their basics, you know, without, without lavishness. But the, the early retirement aspect of this is what really rubs me wrong because particularly for a brand new doc. So, you know, the doc who's 33, 35 years old and they're coming out and they want to pursue early retirement.
[00:17:19] They're going to be working their fingers to the bone. They're going to be away from their family during the formative years of a child's life. So if you have your kids while you're in training, which some do, I mean, that's my hats off to you, but that's, that's like three jobs, right? Yeah. Um, so they had their kids during training.
[00:17:38] So maybe they have a three-year-old when they, when they get out this. So for 15 years, they're going to be. You know, working so that they can retire early and they're going to retire just about the time that those kids actually don't want to really have anything to do with them right before they're going to head off.
[00:17:53] So you're going to miss things like the first crawl, the first, the first word, uh, first days of school, [00:18:00] uh, you know, those kinds of things. When you're working your fingers to the bone, as opposed to becoming financially independent over that time and not retiring early. So you work a regular job. You spend modestly, you save well, you achieve financial independence over that same 15 year, time period, but you have a balance of life.
[00:18:19] You bring your family in, you keep work in. You've kind of have a, an equilibrium between those two things. And you get to enjoy these kids while they're growing up. And then when they grow up, you'll still have a relationship with them and, you know, you can continue to work. Because that's what you need to do.
[00:18:38] And that's what you got into medicine for it. That was the purpose. And then as things go on you, you continue to be a doctor and you retire when you're supposed to, but all the while you maintain balance. So I think that, um, the financial independence is actually part of the solution to burnout because it brings balance back into the life of, of a physician.
[00:18:58] And I think that re early [00:19:00] retirement is, is part of the problem that goes with burnout, not to mention things like student loans and there's all kinds of other stuff that goes with this. But I think that the focus on early retirement is part, part of the, the burnout and I guess, uh, not to make a pun, but that's, the fire is part of the, the problem of burnout,
[00:19:18] Nate: [00:19:18] right?
[00:19:18] Yeah. I, I think that the word that. Is most meaningful that you just used as balance. And my hope for physicians is that when they start to pursue fire or some vert, their version of their unique version of fire, that that's what they find, they find balance. They also, um, find a good relationship with money where, like you mentioned, spend modestly and that's, you know, that's also unique to you and your income or what modest is, but, um, It seems as though that fire can either exacerbate physician's problems, which is no time, no time with family already working like crazy hours can make it way [00:20:00] worse or it can help them shift their focus to things that they don't really need to work extra hours.
[00:20:07] They just need to live like you, like you said, a modest life and. They can honestly achieve financial independence pretty quickly without a bunch of extra hours, they already make, you know, uh, the top income in the country. Uh, other than me business
[00:20:25] Ben: [00:20:25] owners, it takes the focus off, off earning money and it puts the focus on having options that, that money can buy and brings balance.
[00:20:36] Nate: [00:20:36] And I liked that. Uh, you know, I, um, the debt hater around here and I like that because it, it, it brings that focus on things that are getting in the way of, of that freedom. And it's not just dollars in the bank. It's it's debt. It's how much your family spending, it's your house. And it makes those decisions.
[00:20:54] Um, value-based and it allows you to make really good decisions every [00:21:00] time one of those comes up. So as I read on this topic, uh, I F I found that many of the people writing about the fire movement or financial independence retire early, I don't usually end up retiring once they're financially independent.
[00:21:17] And, uh, w what do you, why do you think that is? I mean, we kind of touched on a few things, but in the end, why don't the people who are writing about this and the love, the movement end up. Taking action on the second half of fire.
[00:21:31] Ben: [00:21:31] I think that the thought of fire is better than the reality of fire. Um, so like I said, over 25 years ago, I was in a.
[00:21:42] Uh, bed and breakfast in Juno are red, your money, your life. And that is what caused me to go into the financial planning industry. It was, it was, uh, a thought that this is so cool. I want other people to have that. And so of course I have been a UN FII practitioner and [00:22:00] as I went along this way, I thought I was going to be, you know, retire early.
[00:22:05] Um, What I've found though, is that once I was able to, you know, have all my bills covered and, uh, I was able to spend time with my kids and have balance and see all those firsts. And once I was able to save all the money that I needed for college and most of the money that I need retirement and pay off my house, once I had all that, and I had the freedom to do that, anything that I wanted to do, I realized that the thing that I'm doing right now, Which is educating people about money and helping people to become financially independent.
[00:22:38] I realized the thing that I'm doing is actually the thing that I love and the thought of retiring early just left me. I mean, I, I don't know what I would do with myself if I retired early, because I found that the thing that I, that I am doing is the thing that I love doing. And I cannot imagine retiring.
[00:22:55] Much less what I would do in retirement. I mean, I would, you [00:23:00] know, leave this industry and probably get right back into it in some educational way. And that's, that's what I can do today. So I think that, uh, people who, you know, go at fire begin to realize that you get. You get that ability to do what you want to do with a nice, secure feeling that, that you, uh, that everything's going to be okay.
[00:23:18] And it changes your mind. It changes your approach to your work and it gives, it brings balance. And it just makes you comfortable such that you think, oh gosh, now I don't have to retire early. I can really do what I want to do. If the administrators changed their mind and they want to sell the hospital out from under me, or they want to tweak my contract or screw things up for me or change the EMR, you know, I don't depend on this place.
[00:23:40] What I do has purpose and meaning. And I want to, I want to practice medicine. I want to, I want to do the thing that I want to do in the way that I want to do it. And I want to do that forever. Cause that's that's, this is my dream. I didn't go into dentistry with the dream of retiring. I got into medicine with the dream of being a doctor.
[00:23:56] And so I think that that is [00:24:00] that's ultimately the, the reason that, that people who go at fire wind up just with fi
[00:24:08] Nate: [00:24:08] yeah. We have to answer the big question, even though you kind of done that just now, but do you think it's a good thing for doctors to set themselves on fire?
[00:24:17] Ben: [00:24:17] I, uh, I think that fire is a good thing and I hope that all doctors would be exposed to fire and have a shot at that and, and determine for themselves whether or not it's something that they really want.
[00:24:30] Uh, I think that retiring early is, uh, is really something for people who just are not meant to be docs. You know, it's for one reason or another, that they found their way into it and it's just not for them. So, uh, I'm going to ride the fence on fire a little bit and say Pfizer, Pfizer, everybody re is for is just for some.
[00:24:49] So, um, in the pursuit of, of retirement, whether it's early retirement or any other kind of retirement, you know, physicians pay more than their fair share of taxes. And so, uh, [00:25:00] we have put together something I want our audience to know about, uh, it's called the. Overtaxed physician's guide to retirement 2021 edition.
[00:25:08] Uh, this is something that you can get at our website. You can go there. Um, so, uh, the way to visit us is to go to physician, family podcast.com. While you're there, you can download the guide. You can also ask us a question, um, on the, on the website, you can email us a question. So that's podcast at physician, family.com.
[00:25:28] You can also call us. We have a, an answer line. The phone number for that is (503) 308-8733 again, five oh three, three oh eight eight seven three three. We'd love to have your questions.
[00:25:41] Voice Over: [00:25:41] Thank you for listening to the physician family podcast. Is there a question you would like answered on our next show?
[00:25:48] Go to physician family podcast.com to record your question while you're there, sign up for our newsletter and gain. Says to tools you can use to turn worries about taxes, investing and retirement into a [00:26:00] lifelong feeling of financial security. That's physician, family podcast.com.
