Everyone has a story. Different needs, wants, and goals, and how to attain them. Your story determines your solution. Whatever your situation and story, locum tenens should be part of the conversation. How do you find out if locums is a good option for you? Start your research by visiting an online, unbiased, educational resource like locumstory.com. Now’s the perfect time to explore locums opportunities and see how it might fit into your career. The variety of options might surprise you. At locumstory.com, you can find firsthand stories about the different reasons why physicians choose locums and the ins and outs of how locum tenens works. Get a comprehensive view of locums—and decide if it’s right for you—at locumstory.com. You can do this and The White Coat Investor can help.
INTRODUCTION
This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We’ve been helping doctors and other high-income professionals stop doing dumb things with their money since 2011.
Dr. Jim Dahle:
This is White Coat Investor podcast number 351 – Physician Side Gigs.
Everyone has a story, different needs, wants, and goals, and how to attain them. Your story determines your solution. Whatever your situation and story, locum tenens should be part of that conversation.
How do you find out if locums is a good option for you? Start your research by visiting an online unbiased educational resource like locumstory.com. Now is the perfect time to explore locums opportunities and see how it might fit into your career. The variety of options might surprise you.
At locumstory.com you can find firsthand stories about the different reasons why physicians choose locums and the ins and outs of how locum tenens works. Get a comprehensive view of locums and decide if it’s right for you at locumstory.com.
All right, welcome back to the podcast. I’m not feeling awesome today. I played in a hockey game last night and had a collision. It’s a non-check league. It’s men’s league hockey. You’re not supposed to be checking each other, but both another player and I were going for a puck and ended up colliding head on full speed. I was laid out on my back for a few seconds and I got up and he was on the ice a whole lot longer than I was, which is I think why they gave me the penalty and I got to recover in the penalty box.
Not feeling too good this morning, but that’s okay. We got a great episode planned for you. Also, before we get into the three interviews we’re doing today, students, our webinar is coming up February 21st.
We do this once a year. I can’t come out to your schools. I cannot come to 120 or 200 or whatever number of schools are out there every year and talk to every group of students. So, we try to do it all at once and we do it on this webinar. It’s 06:00 o’clock Mountain on February 21st. It’s live. You can ask your questions live. I’ll stick around afterward and answer all your questions. You sign up whitecoatinvestor.com/studentwebinar.
It’s basically what medical and dental students need to know about money. We’re going to talk about why your patients need you to be financially secure. We’re going to talk to you about the secret to being a financially successful doctor. Show you how you can not worry about student loans. If you’re one of those rare students who actually has some money to invest during school, we’re going to talk about how to do that. We’re going to talk about saving money during residency interviews, and also why you may be ought to reconsider the to buy a house during residency.
Dr. Jim Dahle:
That’s all going to be February 21st. Anybody can come, I guess. We’re not going to check and make sure you’re a student, but it’s aimed at students. Sign up whitecoatinvestor.com/studentwebinar.
All right, today we’re going to be talking about side gigs. And docs have all kinds of side gigs as you’ll learn on this episode. These are just some people in the White Coat Investor community, some of whom you’ve read their words before or heard from them on the podcast before, but they’re going to talk about what they’re doing in side gigs, and it is an incredible variety.
I’m amazed at all the cool things that doctors are doing for side gigs. And this helps their careers to be a little bit more interesting, helps them combat burnout, helps them to make a little bit of extra money, helps them develop new skills, helps them find other ways to improve the world. So, lots of different reasons why people do this. Let’s get into our first interview with Dr. Daniel Smith.
INTERVIEW: DANIEL SMITH – IV CLINICS
All right, our first guest on this episode is Dr. Daniel Smith. You may know him from columns he’s done for the White Coat Investor. That’s obviously one of his side gigs. We’re actually going to spend most of our time today talking about another side gig he has. He runs an IV clinic. Daniel, welcome to the White Coat Investor podcast.
Dr. Daniel Smith:
Thanks for having me, Jim.
Dr. Jim Dahle:
Tell us what you’re doing with this IV clinic.
Dr. Daniel Smith:
Yeah. The idea is that people that have an urgent need for fluids, whether it’s a stomach bug or pregnancy induced nausea or just getting behind with jet lag, of course, there’s always the occasional hangover thing. Those people have a need for fluids quickly and instead of going to the ER, waiting a couple days to get into your PCP, it’s just easier and quicker to administer them directly.
Dr. Jim Dahle:
So, how does your clinic do that?
Dr. Daniel Smith:
What happens is people call us and if they’re a new client, what they do is they have an initial screening with me. I make sure that their medical history and medications are appropriate for what they’re asking for. And then once I screen them, they go on either to the in-clinic location or we have a concierge surface where they actually go out to the client and administer the IV fluids plus vitamins, maybe a few meds, depending on what they need. Yeah, we deliver it directly on site.
Dr. Jim Dahle:
Yeah. Two grams of IV push Dilaudid or what?
Dr. Daniel Smith:
Man. The only meds that we do are Zofran and Toradol and Benadryl. Non-narcotic for a reason. Nothing ketamine or anything like that. Just standard vitamin concoctions, things like you’d find in a Myers cocktail or something similar.
Dr. Jim Dahle:
Very cool. What do they pay for this service?
Dr. Daniel Smith:
Well, the least expensive, what we call à la carte drip, and they’re called Drip. That’s the name of the company. The least expensive drip is about $115-ish. We do have a membership model where if you’re looking for a performance edge or first term pregnancy, the first trimester is miserable with some nausea, you can get a membership and then the cost dips down precipitously after that. But the least expensive, like I said, off the shelf drip is about $115.
Dr. Jim Dahle:
$115 gets you a bag of LR.
Dr. Daniel Smith:
Basically so.
Dr. Jim Dahle:
Okay. And how much more does it cost to have them come out to your house?
Dr. Daniel Smith:
There’s about a $50 surcharge on top of that that makes sure that the nurse gets paid adequately for their time and mileage because they’re driving out to the client’s location, usually their house.
Dr. Jim Dahle:
And obviously, you’re doing the medical screening, the exams, whatever you want to call it, to make sure you’re not giving these fluids to somebody that’s already 25 pounds up with CHF fluid.
Dr. Daniel Smith:
Right.
Dr. Jim Dahle:
But do you worry about malpractice liability or an allergic reaction that someone has to Toradol at their house? What do you worry about when you think about your business?
Dr. Daniel Smith:
Yeah, absolutely. We have a malpractice/liability policy for myself and also for the nurses that work with me. It’s a $1 million, $3 million policy, kind of like you’d have in medicine standard. We also have, like I said, Benadryl on site for any allergic reactions. We’re going to have EPI here soon and we’re going to have them carry a small bag of Solu-Medrol just in case there is something like that.
All of our nurses are ACLS certified, not that you’re going to have a crash cart with you, but they’re all very highly trained. And so, if there was an emergency, they’d be very capable. We also do pre and post infusion vitals. So, if you bring someone in and they’re not looking super great, of course, no one’s getting a drip when they’re feeling their best, obviously. But if you bring someone in, they’re not looking super great and their vitals look iffy, the nurse always has the prerogative to either call me or just say, “Hey, I don’t think this is what you need. Maybe what you need is a doctor visit.”
And so, we make sure that we kind of get ahead of those types of things. But of course, allergic reactions do happen, anaphylactic reactions do happen. We’ll be prepared for the more serious ones as soon as the EPI and the Solu-Medrol come in. But I think prevention being worth a pound of cure is probably the biggest thing for our business.
Dr. Jim Dahle:
Are you getting any flack from primary doctors in the area or urgent cares or emergency departments? Do they feel like you’re a competition or are they just glad to have somebody else around helping people?
Dr. Daniel Smith:
Right. Well, I’ve only gotten direct feedback from one other medical professional. That was a pharmacist who was friends with a young lady whose young son got bad sick. It is the cold flu GI bug season. And her son got sick and then he ostensibly gave it to her. And so, she was asking a pharmacist friend, “Can you do something for me?” And the pharmacist said, “You need fluids, you need something for nausea.” And she said, “I can’t leave my house because my son is sick.” Basically the logistics of it just worked out very poorly unless they wanted the truck over to the ER.
And so, they actually reached out to us and we got her a bag of fluids. We got her some Zofran, we got her a little bit of Benadryl because Benadryl is actually a really good anti-emetic. She felt great the next day. And then the pharmacist actually reached out directly to us via email and said, “Thank you so much for the service. I’ll be recommending it.”
We’ve not gotten any negative. I’m sure some people feel like toes are getting stepped on or maybe at some point, but we’re doing our best not to compete. We really want if there’s another physician who has a strong opinion for against that, we take that into consideration because obviously someone’s personal physician knows the patient a lot better than we’re going to know them.
Dr. Jim Dahle:
How did you learn about your state and local regulations that affected this sort of a business?
Dr. Daniel Smith:
There’s a lot of due diligence that goes into it. A lot of it is just looking up the code and regulations. In fact, one of the reasons it’s so difficult to do this in Alabama is because Alabama requires a good faith exam or a screening before they get it, which makes sense. But other states like Georgia don’t have that. And so, the bar is a lot lower.
Most of it came through direct research, looking into other people in Alabama who also did this. What are their requirements? My business partner and I actually went to a competitor and got the service and just wanted to see how they were doing it so that we could make sure that we weren’t missing anything. We have a few nurses who’ve also done this before and they’ve helped us as well, saying, “Hey other people do this. You may want to consider adding this in.” And so I’ll look it up and research it.
But there are definitely a lot of regulations that you have to follow because several places near where I am in Birmingham have actually gotten in trouble for administering, for example, glutathione without prescription. Certain things like glutathione, which we know is a modified amino acid, or amino acid derivative, is actually a medication compounded directly and it has to be written with a prescription from a physician.
For those patients, these other infusion centers were just basically cash and carrying them, stocking them, ordering them, bringing them to the clinic, and then just handing them out to whomever. And obviously that violates our state statutes.
A lot of it’s been direct research by me. And then a lot of it’s been nurses and then a lot of it’s been also just looking at what other centers are doing and making sure that we’re not running afoul of anything.
Dr. Jim Dahle:
Now, one of your biggest expenses, of course, is the nurse’s time. Does that mean that all the fluids go in with the squeezer bags? So the nurse isn’t there quite as long or how do you save on your staff time?
Dr. Daniel Smith:
Right. Well, we do have pressure bags for people that need to be in and out quickly, but the way that we’ve set up nurses compensation is that in the clinic, the compensation is a little bit lower because they’re basically getting a scheduled regular paycheck, so to speak.
Also, in our clinic, any tips that the nurse gets from the client go directly to them. We don’t take a piece of those. And so, what’ll happen is a nurse and a client will develop a relationship. I’m making that up, Susan. We don’t have a Susan, but if we did, I like Susan, she knows just where to stick me. She’s a great stick. We had good conversation. People end up requesting those nurses developing the relationship and then leaving them pretty substantial tips. One of our nurses went out to a client’s home and administered an infusion and left our nurse a $60 tip. $60 on top of what you’re already getting paid is not a bad way to do it for something that takes about an hour to administer.
Dr. Jim Dahle:
Yeah, I’m not going to have any nurses left in my ER soon if they find out about this sort of thing going on. But how much competition is there? Are there four or five companies competing with you? How much is there out there?
Dr. Daniel Smith:
We’re not in Birmingham proper. If we were, the competition would be a little bit higher. We’re actually in Trussville, just northeast of Birmingham. In Birmingham proper there are three other clinics doing it. And I think actually one recently closed their doors. I think it’s because they ran afoul of some regulations. But really there’s enough business in the Birmingham metro area to go around easily for four clinics even just because you get these populous cities where you have a hard driving group of citizens who are busy all the time or going out a lot or just living their lives.
And one of the things you want to consider is where you’re putting your clinic. It needs to be in a place where there’s at least a reasonable amount of disposable income because this is not cheap. This is not something that your person making $50,000 a year as their household income is going to be able to get regularly. And so, I think placement is really important.
And so to that end, I think we’re very well placed. But if you go to Atlanta, there’s tons of them, like you said earlier, in Las Vegas, there’s tons of them. And so, it really just has to do with the demand. I think when you get to the bigger cities, and Birmingham is the biggest city in Alabama, there’s definitely enough demand to support it.
Dr. Jim Dahle:
Remind us again what your regular gig is. This isn’t your main gig now, right? You’re still practicing medicine mostly on the side. What do you do?
Dr. Daniel Smith:
Yeah, I do non-surgical sports with Andrew Sports Medicine.
Dr. Jim Dahle:
And how much of your time do you think you put into this IV clinic side gig?
Dr. Daniel Smith:
It’s been a lot. One of the things that I wanted to make sure, that it didn’t infringe upon my primary duties. My patients that I see at Andrews are my first priority. And the nice thing about this is now that I’ve put in the number of hours that I have and my business partner has, a lot of it is running itself. They’re scheduling on their own. The screenings I’m trying to outsource to someone else right now so that disintermediates me. But I would say from the startup, we’ve probably put in, my business partner and I together, I don’t know, a few thousand hours. It’s a lot.
But one of the things about this kind of business is that once you get the legwork, and you know just from the White Coat Investor, you do a lot of the legwork on the front end and then it kind of builds upon itself. And I think we’re to the point now where it’s starting to build on its own momentum.
Dr. Jim Dahle:
Well, the fun thing about having a business is not only does it make income, but there’s some value building there. The more you make is some multiple of that is what the business is worth and can be sold for. So, how many years have you been doing this now? How long has it been?
Dr. Daniel Smith:
It’s actually less than a year. We started this in October of last year. And it was at first word of mouth, just people that my business partner and I knew. And then as we created it and we fine-tuned it and we polished the rough edges, it’s grown now towards people are referring their friends and things like that. But only a few months old already.
Dr. Jim Dahle:
Yeah. And do you feel comfortable sharing how much profit is kicking off in a given month now?
Dr. Daniel Smith:
Well, right now, because the upfront costs were so great, for us, they were about $60,000-ish for myself and my business partner. We’ve not yet broke even on that being open only four months. But we anticipate a break even about March or so once the clinic location is finalized. Currently the clinic location is being renovated. I actually bought the building where the clinic is going to be, and that building is going to be split between the clinic Drip and another medical practice, actually a sports psychology practice.
And so, I bought the building. That’s just on me. And then my business partner and I are going to put the physical location of Drip, and once that building’s been renovated, it’s going to be very high touch. But as much demand as we’re getting, in between our conversations today, I’ve had two more people approach me to schedule concierge drips. And that’s been 15, 20 minutes. And so, the demand, I think, is going to be so great that we’re breaking even two months into a physical location and I anticipate revenues will be $150,000 a year. Hopefully my business partner and I are netting profits once we get established about $6,000 a piece per month.
Dr. Jim Dahle:
Yeah, that’s pretty awesome. That’s substantial side income for just about any doctor. Congratulations on your success. Thanks so much for being willing to come on the podcast and talk about what you’re doing as a side gig and I hope it continues for you.
Dr. Daniel Smith:
Thanks Jim. I’ll keep you posted.
Dr. Jim Dahle:
Okay. That was a lot of fun. And he mentioned after we stopped recording, he may franchise this in the future and be advertising on the White Coat Investor. There may be an opportunity for him to show you how to do this as well in the future.
All right, let’s do our quote of the day before we get into the next interview. This one comes from Warren Buffet who said, “I’ll tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful and you try to be fearful when others are greedy.” Great quote, classic one from Buffet.
By the way, I know a lot of you have done our survey. It’s super helpful. You can find that at whitecoatinvestor.com/survey. One of our partners also does a survey every year and we often use that information in a blog post and share that with you. They’re Laurel Road. They’ve been a great partner with us for many, many years. And they’re also looking for docs to complete their survey.
They basically ask if you have student loans and you’re stressed about the amount of debt you’re carrying, you are not alone. We’re looking for doctors within our community to take part in a survey commissioned by a WCI partner and digital banking platform, Laurel Road.
Their goal is to capture responses and use the information to better serve their community with relatable content, valuable products and services and more. You can take that survey today at whitecoatinvestor.com/laurelroadsurvey.
INTERVIEW: GRETCHEN GREEN – EXPERT WITNESS
All right, let’s get into our next interview. This one is with Dr. Gretchen Green. All right, our next guest on this podcast is somebody that’s been with us before. Dr. Gretchen Green, welcome back to the White Coat Investor podcast.
Dr. Gretchen Green:
Thank you. It’s great to be here again.
Dr. Jim Dahle:
Remind people what your side gig or side gigs really are.
Dr. Gretchen Green:
Sure. I’m a radiologist in North Carolina and around 2015 I got a call out of the blue to review an expert witness case. I did that, found I liked it, didn’t know anything about how to do the work or to build that as a business where I could get more cases. And then in 2016 I built out starting my expert witness business. Over time that has expanded and in 2020 I began teaching other physicians how to launch and build their expert witness businesses.
Along the way, there’s also been more ways that I’ve put these skills stacked for board use, building other businesses, expanding my courses now to also include mammography malpractice and medical board case review. I’ve also gotten into real estate, which has had its own side evolution as another business too. But everything really came from starting an expert witness business.
Dr. Jim Dahle:
Yeah, pretty awesome. Really three different side gigs and a main gig here. How do you divide them up? Time-wise and income-wise, how do they play out? Has one of these side gigs become the main gig?
Dr. Gretchen Green:
It has. I left where I had been for 10 years, a private practice group as a full partner. And that was in 2016 that I left that group. As my time was shifting towards wanting to do additional things, I wanted to have more time not only to expand my work in other fields like expert witness work, but also for nonprofit board service, which I’ve now been doing for quite some time. And that plus my family’s needs, all set that stage to start this as a really dynamic process that has continued to evolve.
My time working clinically has decreased such that in 2023 I was doing about a day per week and my business work doing expert witness business building, teaching coursework, now doing marketing to expand that reach for experts to help them get more cases and also my nonprofit board work. Those have all expanded over that time.
Dr. Jim Dahle:
Yeah. The nonprofit board, is that a paid side gig or is that volunteer work?
Dr. Gretchen Green:
It’s always been volunteer work. And this has been something that I’ve been very passionate about and it’s been wonderful to see these projects now come full circle, such that my work with the National Women’s History Museum serving in on their board for about seven years or so. And I have my holiday card to show the picture. This is my daughter and my mother that we were holding hands, as I said, I would always do in front of our first in-person exhibit in Washington DC.
That was a real milestone in 2023 that I was thrilled to be able to achieve. And also through donations through many years, through additional income with side gig work as well as my main income has really helped to fuel that.
I also just completed the service as the chair of the space camp alumni board chair. And so, over the past few years I’ve had the opportunity to really give back to that organization, to help inspire and train what I hope was a whole new generation of astronauts, to help make this world a better place and help everybody continue to look up for inspiration and make the world a better place.
And so, I got to hang out with some pretty cool astronauts and other people associated with the space industry over the past few years. And again, part of my mission with the side gig work and additional businesses has been donating some of those profits to support these organizations that for me are so helpful for history and STEM education. And again a holiday card, this is what I send to lawyers by the way thanking them for retaining me and forgiving business that gives back to others and supports my family.
And so, my daughter and I were there in front of the operations building desk that I donated. So, when you walk into a space camp and you want to know where to go, where your kid goes or where you as an adult get to go to your camp, you first see this welcome desk. It has my name on the front and my mantra “Onward and upward always.”
Dr. Jim Dahle:
Awesome.
Dr. Gretchen Green:
I hope to inspiring people when they see when they walk in the door to remember that mission doesn’t stop just with that experience.
Dr. Jim Dahle:
So you’re doing it sounds like probably about 0.2 FTEs of clinical work still. Something like that, 0.2, 0.25.
Dr. Gretchen Green:
That’s right. And again, seasonally that may change as well, but that’s just about right.
Dr. Jim Dahle:
How much time are you spending being an expert witness yourself compared to that?
Dr. Gretchen Green:
It’s really flexible and I think that’s one of the ways that expert work has really evolved. Even since when I started teaching these courses in 2020, it’s never been easier to work from home doing expert witness work and even depositions now. I just had one this week where it’s remote now. I’d say 95% of even depositions are remote.
To answer your question, how many hours per week? It’s almost entirely on my own time at maybe an hour or two a day. But it gets very like our clinical work sometimes, it gets kind of bunchy if you have an active case that has something coming up. Sometimes there may be a few more hours, but it’s pretty easy to scale that. And I’ve always found that it’s easy to work that time in as I’ve learned my time management skills and refined my systems to be more efficient.
Dr. Jim Dahle:
Do you think you could expand being an expert witness to 0.8 FTEs of your time?
Dr. Gretchen Green:
There are certainly some specialties who typically do much more expert witness work in terms of their overall percentage of time. The states, they vary from state to state, but there are some general rules about how much time that you need to be spending doing clinical work versus expert witness work. But in general, about a day a week is a decent threshold to be able to qualify in pretty much any state that has just normal criteria.
But there are certainly psychiatrists, certain pathologists, others who really have even a more criminal, in addition to civil trial, applicability of their skills. They can be doing a lot more expert witness work. But even for someone who works just a few hours a week at $500, $700 an hour, doing that math, you can pretty quickly get to $100,000 six figure side gig income for a very short amount of time.
Dr. Jim Dahle:
If you stopped working clinically, what would happen to your ability to do medical expert witness work?
Dr. Gretchen Green:
Most states have a period of time after complete retirement from clinical work that you can work out your cases. It ranges from 18 to 24 months or so. And so, there is an opportunity understanding that people’s career life cycles will change and that you would ramp down your practice as you are approaching retirement. And then you’d have the ability to work out what is a typical lifecycle for a case.
Cases can last years though, so it can take some time. Every once in a while despite everybody’s best efforts you may have a case that continues even after your retirement. I do have lawyers who routinely reach out to me now for referrals for experts as my network of lawyers has grown to more than 10,000. And my expert network has also grown to several thousand. It’s not uncommon for them to say “My expert retired, I need a new one.”
I have one I was emailing just this morning who has a case going to trial actually in March and he needs a new expert because his expert retired and timed out. So, that’s a great opportunity for the experts who I reached out to today to say, “Hey, this is a great way to start.” And this has happened actually pretty routinely. When I do a marketing email out to my 10,000 lawyer database, they often will approach experts and when they need you, they need you. So, it’s great to be ready and have these skills and be ready to go.
Dr. Jim Dahle:
Now it sounds like your medical expert witness course business has certainly expanded dramatically. You’ve been very successful there. Is that now a better side gig than actually even doing the medical expert witness work itself?
Dr. Gretchen Green:
It is. This falls into those categories of things you probably never saw yourself doing in the future. I never anticipated doing a course, becoming an educator in this way. I remember at the end of fellowship when I was at the Brigham in Boston and the chairman had requested a meeting with me. And I remember walking through the campus and saying, “I think I’m about to turn down a job at Harvard.” I’m a girl from cornfields in Illinois first to go to college in my line of women in my family. And I thought, “I better think pretty carefully about this decision before I go in there and say no to this.” I did and I chose to go into private practice.
I always thought that teaching and academics looked like what we saw in residency with residents and attendings and trainee programs like we’re all familiar with. And this has just been an amazing opportunity to still be an educator in this role and to see my students progress along now for several years. They’ve built five, six plus figure incomes. They’ve progressed from having additional money that helps them achieve new spending goals to truly investing it differently, investing in themselves, building new businesses and taking control of their time.
If you talk about something that gives you financial freedom, this is a great way to work towards something that ultimately gives you that degree of freedom and to really think about things that matter to you. For me, it’s been about impact and service to others. It’s also been about taking the opportunity to have amazing personal opportunities.
And so, I get to show the picture here of me on the North Pole. This was 2022 and I got to go with my mom and my daughter. We had three generations of women in my family funded from side gig income, from the course business, from my expert witness work and then also from the businesses that I’ve invested in and built my skills doing. These are just priceless memories and it’s a way that I know that we’ve created something that goes beyond ourselves.
Dr. Jim Dahle:
Pretty awesome. You also mentioned real estate. Is that more of a side gig for you or is that more of an investment for you? Are you investing pretty directly and heavily involved or is it more passive for you?
Dr. Gretchen Green:
Yes, it’s active. In 2019 I took Leti and Kenji’s course on becoming a multifamily real estate owner. And it’s been active during that entire time. I tried to have it be passive. I talked with somebody who’s really good about teaching folks how to raise capital for real estate. And he said to me on the phone, “Gretchen, I think you can do this on your own.” I was like, “Oh, rats, I was hoping you could help me out here. Because I feel very busy and I don’t have a lot of time, but okay.” It’s one of those people in my life who’s just given me the right advice at the right time.
And so I did, I invested in three apartment complexes in 2020 and then in 2021. That was of course wonderful timing in January of 2020 to acquire 40 apartments and then take them entirely through the pandemic with all the challenges, the fiction moratoriums. It really, again, forced growth that I had to stack all these skills that I’d learned from running the expert witness business and really put those to work. So, they cash flow, they’ve been profitable. I have utilized the tax advantages to really make some big financial strides, Roth conversions, things like that.
Again, magnifying the impact of some of these moves can go just beyond what is the dollar value per hour. And it’s interesting though, because with real estate, it started as a way to invest the extra expert witness income in a way that would be more tax efficient. I met with my CPA and she said, “The more W2 income you get, the more taxes you’re paying and here’s how it’s impacting you with this progressive tax bracket system.” And we looked at it and said how else can we do a little better with this in a way that helps leverage skills and build something that’s an asset as an investment?
And so, when she pointed out that a lot of her wealthiest clients had real estate, that kind of lit the light bulb in my mind. And at that point I took Leti and Kenji’s course, from Semi-Retired MD. I was also doing a lot of coaching in 2020 through Sunny Smith’s Empowering Women Physicians course. I’ve now become a certified coach.
And so, having wonderful mentors like these people who put these lessons to use has just been so very valuable. December 29th at 4:56 PM I completed a next evolution of the real estate. And now I have sold one of the businesses from the real estate that I owned actively, did a reverse 1031 exchange and bought an ocean front beach house as a short-term rental.
Now, again, it’s more evolution, just more using these skills, pivoting a little bit differently, but working hard on this and having great mentors and people who have supported me has really helped me gain that confidence to do these new things and to approach it with a growth mindset mentality of “I don’t know that yet, and I’m going to learn it and figure it out.” And that’s what really drives me now.
Dr. Jim Dahle:
Are there any side gigs you haven’t tried yet?
Dr. Gretchen Green:
Gosh, there are so many side gigs. I know Peter Kim, the king of Passive Income MD side gig, the hustle, so to speak. I haven’t done clinical side gigs. I have done consulting side gigs in terms of participating as a reader in some AI studies for new breast imaging technology. That’s fascinating and something that it pays well and it’s a really great opportunity to work with people who are true technology and information innovators in the medical field.
It’s just fun to meet people like that and to hear their stories of how they fit the build to see this need of a solution to a problem and how they came up with a new idea. So, that’s been very interesting working with AI companies and for both breast ultrasound and for mammography to see how can we find cancers better and help us work smarter, not harder.
But I don’t know. I’ve always got my radar up. I’m looking forward to hearing the other speakers on this podcast. And I listen to a lot of podcasts and read a lot of blogs, so I just love learning when people have new ideas.
Dr. Jim Dahle:
Yeah, pretty cool. All right. Well, it all started with expert witnessing and your expert witness startup school is opening for registration again. It opens on January 16th, closes on January 29th. You can go to whitecoatinvestor.com/expertwitness to enroll in that. It offers CME credits, it’s eligible for 12 category one CME credits. And that allows you to potentially use CME funds or write it off as a business expense in order to take that class. Again, that’s at whitecoatinvestor.com/expertwitness and that’ll teach you everything you need to know to get started expert witnessing. And as you can see, that can lead to all kinds of other stuff. Gretchen, thanks for being on the podcast.
Dr. Gretchen Green:
Thanks so much. And I would just add that one of the changes we’ve made, an update, as soon as people enroll, they get the whole course at once. A lot of people start and they are ready to go. So you can start, you can binge it, do the whole course. We do have the four live Q&As that go for those weeks to offer that kind of support. I’m here to help people to get through mental speed bumps that we all have in starting something new. Once you take the first step, everything else just follows. So, thank you for your support, everything that you do to help with financial literacy and enable physicians to have financial freedom. It’s truly priceless.
Dr. Jim Dahle:
Thank you very much.
Dr. Gretchen Green:
Thank you.
Dr. Jim Dahle:
Okay. All right. It’s exciting to talk to Gretchen again. And obviously she’s opening up her course if you’re interested in doing some expert witness work. But it’s also inspiring just to see all the other stuff she’s dabbled her fingers into and has become a little bit of a side gig queen there and yet still practicing medicine. I love people that are able to stay in medicine and do all kinds of other interesting stuff at the same time.
INTERVIEW – RIKKI RACELA – SURVEYS
Our next interview is with longtime WCI columnist Rikki Racela. Let’s get him on the line, talk with him about his side gig. We have Rikki Racela here, WCI columnist, back on the podcast to talk about some of his side gigs. Rikki, welcome back to the White Coat Investor podcast.
Dr. Rikki Racela:
Jim, always an honor to be on. Thank you again for all that you do.
Dr. Jim Dahle:
Yeah. All right. The main gig for you is being a neurologist. You’ve got really a couple of side gigs. You write for WCI, you do columns periodically for us, but the one I think we’re mostly going to talk about today is you do surveys. You do surveys for money, physician opinion surveys. Tell us about how you got started doing that.
Dr. Rikki Racela:
I’m not exactly sure how it even began. I suspect it was when I went to a job fair in New York City actually. I was putting my email down for every sort of recruiting company, but I believe there was also some companies looking for doctors to do surveys. This was circa 2010, 2011. I don’t think the surveys were very popular then. And they were probably trying to just get names of doctors and their emails to send out surveys. I believe it started then.
I do remember getting surveys. I had probably told them I was a resident at the time, so I temporarily wasn’t exactly when I had signed up then, but when I became an attending physician, that’s when I got these surveys. I think when I put my email down at that job fair, I had also put down that I’m still a resident and they made it a point to really contact me through email when I became an attending physician. I think it was then.
What ended up happening was it sort of snowballed from there. Once I did one survey, I also got surveys from other companies. I think not only did they give my email, I got my email on one list, but the companies also would send my information to other survey companies. I’m not sure if they sold that or whatever, but as I did more surveys, I got more surveys from other companies and it served to snowballed from there.
Dr. Jim Dahle:
All right. Well, for those who are interested in doing surveys, you can find out about these, we have them all on one page at whitecoatinvestor.com/mdsurveys. Actually, I had a complaint recently about that. We have also made that available at whitecoatinvestor.com/dosurveys and whitecoatinvestor.com/physiciansurveys as well. But there’s a number of companies listed there, Incrowd and Sermo and Spherix and Zoom Rx and Opinion Site and MDForLives. Which of these companies do you do surveys with, Rikki?
Dr. Rikki Racela:
All of them. As you usually mention and that I have written about, I made $30,000 in surveys. It’s because I deal with all of them. MDForLives is the only one that I did have some struggle with the surveys. I’m doing them now, but actually getting hooked up with them was probably the last one. But I’ve been actually doing years with all the others actually. And they’ve been excellent and they’re always reaching out to me with opportunities. Because I’m a neurologist and there’s a lot of new neurological drugs, that’s probably the reason why I’m able to make so much within this side gig.
Dr. Jim Dahle:
Yeah, $30,000 a year is not insignificant. For a lot of docs that’s an extra month, month and a half, two months of pay.
Dr. Rikki Racela:
Yeah, exactly. That’s definitely more than a couple paychecks for me.
Dr. Jim Dahle:
Yeah, absolutely. Some of the complaints I occasionally hear from people doing surveys is they feel like they do have the survey and then they’re screened out of the survey. And they sometimes wonder if they just did it for free, that they actually did the survey the company wants and the company didn’t pay them. How often do you feel like you’re getting screened out of surveys?
Dr. Rikki Racela:
Actually, it was happening more frequently initially when I started. As I’ve got to do more surveys, I knew what they were looking for. I just did a survey for a migraine drug, for example. I see a lot of migraine patients, I can really talk about it. Initially, as they’re asking like, “Oh, are you a headache specialist?” Maybe one of the screening things. I can say, okay, I see they’re probably going to go for a migraine patient. I see a lot of those patients. I’m going to continue to continue with these screening questions.
I also had another survey that I didn’t even bother with the pre-screening questions because I knew they were looking, it was more for neuro-oncology, it seemed like they wanted a neuro-oncology specialist, which I am not. I don’t see those patients a lot. I could see the frustration if you go through the entire prescreening questions because that could take 5, even 10 minutes of time. But I’ve learned to see what they’re looking for and I don’t even do the pre-screening questions if they’re looking for sort of a subspecialty that I don’t have any insight into.
Dr. Jim Dahle:
Yeah, with experience you can limit how much time you waste doing that. That sounds like that’s the key is just stick with it and you get better at I don’t want to say gaming the system because you’re not gaming it, but understanding the system.
Dr. Rikki Racela:
Right, exactly. But I can understand the frustration. A lot of times when I was starting out, I was going through these prescreening questions and getting screened out, and it got frustrating. But then I learned to sort of say, “Okay, I know what they’re going for, I’ll keep with the prescreening questions” and I really set myself up for being successful in qualifying for a survey.
Dr. Jim Dahle:
How much hassle has this been for you? They send you a 1099 each year and that’s it. They direct deposit the money into your bank account once a month or how’s it actually work?
Dr. Rikki Racela:
There is quite a bit of hassle because like you mentioned, those multiple companies, they will all send you 1099s. It’s mostly my accountant that might get frustrated, but that’s why I pay them. But also, the sort of problem is when you have a side gig, I guess it’s with any business, you have to make payments to the IRS. What is kind of tough is this is very sort of… I say $30,000. Hey, it could be $10,000 one year. Actually I made more this past year, it looks like, even up approaching $40,000. Because the swing in income is tough. It just depends on how many surveys you qualify for and if there’s a new drug out. It’s very hard to make estimated tax payments.
That’s the main hassle that the side gig brings. Because it’s multiple 1099s but also it’s not a steady stream of income. That’s the most hassle. If you don’t like doing surveys, then it would be even more of a hassle because I find that if I have downtime and I’m doing a survey, I feel like I’m utilizing my time. But if you don’t like doing them, then that would also be a hassle. I don’t consider it a hassle.
Also, in my downtime at night, I do a lot of surveys. My wife finds it more frustrating. My wife might want to watch TV so I try to spend time with my wife as much as possible, but sometimes I’d rather do a survey, so she finds it more frustrating than I do more of a hassle. But then again, she’s watching like Selling Sunset or some other mindless Netflix shows that I’m not interested in. So, my family, especially my wife might find it more of a hassle. For me, it’s really just estimating sort of my estimated payments to the IRS.
Dr. Jim Dahle:
Awesome. Well, at least you’re together. I never thought that sitting together watching TV or sitting together watching a movie was incredibly being together anyway, so I figure it doesn’t matter if you’re together and one of you is doing a survey and one of you is watching a show. Good for you for being able to take advantage of some of your downtime.
Dr. Rikki Racela:
Yeah, absolutely. And it’s really something that is just minimal effort. It’s a good balance for my clinical work where there’s a lot of mental effort where you take care of patients and try to explain the disease or try to treat them.
Dr. Jim Dahle:
Yeah, I get the impression that this is more profitable for some specialties than others. Those who tend to prescribe expensive drugs, I think their opinions are highly valuable. Those in emergency medicine, maybe not quite as much, although I’ve met emergency docs that also make a significant amount of money doing surveys. Anything else we should know about doing surveys as a side gig?
Dr. Rikki Racela:
Yeah, just to your point, really it’s because of being a neurologist and there’s a lot of new, exciting drugs coming out. That’s why I’m able to have a lucrative side gig out of the surveys. My wife is an anesthesiologist, and I’d written this in my blog post. There are no surveys for anesthesiologists unless you are a pain specialist. I tried to get her to do some of them. And as an anesthesiologist, most of those surveys she would always screen out because they’re looking more for a subspecialty trained anesthesiologist. To your point, this is not for everybody depending on specialty.
Dr. Jim Dahle:
Yeah, I think it’s probably great for oncologists and neurologists and rheumatologists and probably general internists, but I don’t know that it’s actually that awesome for anesthesia and emergency medicine and maybe obstetrics, that sort of thing. I don’t know. But the only way to find out really is to try, see how many surveys you get and see how often you’re getting screened out.
Dr. Rikki Racela:
Yeah, absolutely. And also what I’ve been doing a lot to make it even more lucrative is they want maybe an hour interview or 30 minutes interview, almost on Zoom or maybe just on telephone, but those generally pay much higher. They know that as doctors, your hourly rate might be kind of high. For an hour survey, they’ll pay you $300 to $400 if it’s one-on-one, either Zoom or over the phone. That also is the big boost in my side gig income with these surveys. It’s not really the online ones. A bulk of it is those actual one-on-one talking on the phone or through Zoom.
Dr. Jim Dahle:
Awesome. Well, if you’re interested in doing surveys, again, you can sign up whitecoatinvestor.com/mdsurveys or whitecoatinvestor.com/dosurveys and start receiving those and figure out how much money you can make doing a side gig that you can do from your couch or while commuting on a train or a bus or whatever. Thanks so much for coming on the podcast and telling us about that, Rikki.
Dr. Rikki Racela:
Oh, Jim, my pleasure. And thank you for inviting me.
Dr. Jim Dahle:
All right, that one is fun. Super low barrier to entry with that side gig. Again, if you want to sign up to do these surveys, it’s not hard. We’ve got them all listed at whitecoatinvestor.com/mdsurveys or whitecoatinvestor.com/dosurveys or whitecoatinvestor.com/physiciansurveys. Whatever. They’ll all take you to the same place.
I know we’ve read off a lot of surveys URLs today. We’ve got the White Coat Investor survey, our annual survey we do each year. That one helps guide our content. That’s at whitecoatinvestor.com/survey. There’s the Laurel Road survey. They’re looking for docs to complete their survey. It’s a big focus on indebted docs with student loans, etc. But that’s at whitecoatinvestor.com/laurelroadsurvey. And of course, if you want to get paid for doing surveys, you can get paid I guess by doing our survey. We’re entering you in a drawing for prizes, but you actually get paid by doing these surveys like Rikki is doing. And you can find those at whitecoatinvestor.com/mdsurveys.
Okay, I think we’ve given you enough URLs to keep track of today, but it’s been a pretty great episode I thought. I really love seeing what people are doing with side gigs. They’re all so unique and so different, and you can find one that matches your needs. You don’t have to do it throughout your career. Maybe it makes sense for you to do it early in your career or a mid-career when you’re feeling some burnout. Or as you’re starting to wind down in your career later, you can look for these side gigs. Lots of options there and opportunities.
SPONSOR
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All right, thanks to all of you out there, by the way. Without you, this isn’t much of a podcast and I appreciate what you are doing every day. I know some of you are working out, some of you are walking, maybe you’re walking the dog in the afternoon or the evening or the morning while you listen to this. Maybe you’re commuting into work, maybe you’re coming home after a hard day. And if you’re like me, you don’t always get a thank you when you’re at work. So, if no one’s said that to you today, let me be the first. Thanks for what you’re doing.
Also, thanks for sharing this podcast with friends, family, neighbors, your docs, whatever. Those of you who leave us five star reviews also help us to spread the word. Our most recent review came in on Christmas Day from Woof755, who said, “Essential financial podcast. Dr. Jim Dahle has been looking out for docs for well over a decade. He provides evidence-based and influence-free advice in order to help docs get their finances in line. Absolutely essential listen.” Five stars. Thanks so much for that great review.
For the rest of you, keep your head up, your shoulders back. You’ve got this, and we can help. We’ll see you next time on the White Coat Investor podcast.
DISCLAIMER
The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.
INTRODUCTION
This is the White Coat Investor podcast Milestones to Millionaire – Celebrating stories of success along the journey to financial freedom.
Dr. Jim Dahle:
This is Milestones to Millionaire podcast number 154 – Psychiatrist pays off $460,000 in student loans.
If you’re like most doctors, nobody taught you anything about personal finance or investing during your undergrad, professional school, or residency. And even though your family – and perhaps even your business – rely on you to be the Chief Financial Officer, you have never been given the tools to succeed.
Enroll in WCI Financial Boot Camp, a FREE educational email series, and learn to convert your high income to wealth. You will learn the basics of investing, saving, insurance, and more. Your high income alone will not lead to financial success, but as always, we want to help you on your financial journey. Go to whitecoatinvestor.com/financialbootcamp to sign up today! You can do this and The White Coat Investor can help.
Welcome back to the Milestones to Millionaire podcast, where we celebrate the milestones on the way to being a millionaire and beyond. In fact, we’ll celebrate any milestone with you. I don’t care how small it is. Maybe it’s paying off a bicycle loan. Maybe it’s getting back to broke. Maybe it’s paying off credit cards or a mortgage or student loans, or hitting $10,000 in net worth, or $100,000 in net worth. We’ll celebrate it with you. Maybe you’re on the other end of the scale. You’ve become financially independent or you hit $40 million in net worth. We’ll celebrate that with you too, and use it to inspire other people working toward those same goals to do the same. If you’d like to come on the podcast, you can apply at whitecoatinvestor.com/milestones.
I’m also going to put a plugin for our other podcast, the White Coat Investor podcast. Both of these podcasts are driven by you. While this one is focused on you and your experiences, the other one is focused on you and your questions and people you’d like to hear from. So, if you’d like to leave a question to be answered on the White Coat Investor podcast, you can leave that at whitecoatinvestor.com/speakpipe.
All right, one other thing you ought to know about is that we have a partner and for the next week you can still sign up with this partner. Her name is Dr. Gretchen Green and she teaches doctors how to be expert witnesses. You can sign up for her course at whitecoatinvestor.com/expertwitness. And if you sign up through the White Coat Investor link, we will give you one of our courses, the CFE Continuing Financial Education 22 course. This is an $800 value.
But the point of the course you’re buying is to start an expert witness practice, not in months or years, but in just a few weeks on your schedule with skills that you already have. And if you’re a physician looking to start an expert witness practice to make more money and create financial security, this is your opportunity. Again, that’s whitecoatinvestor.com/expertwitness.
Okay, we got a great guest. If you saw the title, you know what’s coming. This is a psychiatrist and he is actually really personable. I think he ought to be a podcaster himself. But he’s been listening to this for a long time and listening to all these other psychiatrists who paid off $200,000 or $300,000 in student loans. And he is like, “I can’t wait till I come on because I can beat that.” And he has. He’s paid off $460,000 in student loans. Let’s get him on the line.
Stick around afterward. We’re going to talk for a few minutes about rebalancing your portfolio, which is a mystery to lots of people, but we’re going to make it crystal clear.
INTERVIEW
My guest today on the Milestones to Millionaire podcast is Matt. Matt, welcome to the podcast.
Matt:
Thanks so much. I’m glad to be here.
Dr. Jim Dahle:
Tell us what you do for a living and how long you’ve been doing it.
Matt:
I’m a psychiatrist. I got out of training about 2020. I’ve been here about three and a half years or so.
Dr. Jim Dahle:
Okay, very cool. And tell us what milestone we’re celebrating today with you.
Matt:
Yeah. Just last month I got the payoff letter from my student loans and I paid off $459,900.
Dr. Jim Dahle:
$460,000 in student loans.
Matt:
Right. That’s right.
Dr. Jim Dahle:
This is just last month?
Matt:
Just last month, yeah. In fact, I got the letter in the mail just like a few days ago. Yes.
Dr. Jim Dahle:
Are you just absolutely thrilled?
Matt:
It’s surreal. I was telling my wife, it’s the first time since we started residency in 2016, it’s seven years or so that I haven’t had a month where some kind of amount has been taken out of my account for student loans. So, it seems weird to have some of that money back. I haven’t really experienced it much yet since this will be the first month that I haven’t had something come out. But it seems weird to go forward to know that that’s not coming out anymore.
Dr. Jim Dahle:
About how much a month were you paying most of the time?
Matt:
Yeah. Pretty much I did everything opposite of what you say to do at the start. I refinanced…
Dr. Jim Dahle:
And you still won. Congratulations.
Matt:
Right. I refinanced in 2021 when effectively the interest was zero and I got a 10 year fix at 3.75. And so, my student payments were about $46.60 every month. My wife and I, my fiancé at the time. I was doing that amount for a few months, but I had a decent amount that I was accumulating. We had a discussion and I was just like “I could probably throw more at these things if I really just concentrated on this loan and didn’t do much else.” And so, probably about six months into it, I would increase the payments from about $5,000 a month up to about sometimes $25,000 a month.
Dr. Jim Dahle:
$25,000 a month.
Matt:
Right. Every extra amount that I get with call, with other positions that I was taking up, if I was doing telehealth appointments, everything was just thrown into it.
Dr. Jim Dahle:
So, what were you living on? Were you living on her salary or what?
Matt:
No. She makes good money too, but I had told her when we first started dating that I didn’t want my student loan to be her student loan either. I used only my income on it. But we still had enough to buy a house, get married. We did a few international trips during that time. We’ve been together about five years.
So, we didn’t go crazy, but I won’t say that there wasn’t some lifestyle creep, which of course is the thing that you always hound against. I bought a car, I had put money in stocks because my idea at the time was like, “Hey, you know what? I’m going to put some money in stocks. I’ll have those appreciate, and that at certain point my loans will get down slow enough where I meet in the middle and have that be paid off.” That didn’t work so I lost a decent amount of money on that too. But in the end it all worked out.
Dr. Jim Dahle:
What car did you buy?
Matt:
Tesla.
Dr. Jim Dahle:
How did you pay for it?
Matt:
Loan. It’s not a lease. Yeah.
Dr. Jim Dahle:
So, do you still have a car loan on it?
Matt:
I do. It’s like $17,000 but it’s at 2%. There’s not much left on that one.
Dr. Jim Dahle:
Is it fun to drive?
Matt:
Yes. And it was especially nice to drive. It was especially nice to drive when the gas prices were going pretty crazy. It’s a model 3.
Dr. Jim Dahle:
Model 3. Okay. Very cool. Very cool. Well, despite all these mistakes you say you made, you somehow came up with $25,000 a month to build wealth with.
Matt:
Yeah.
Dr. Jim Dahle:
Is that what you paid last month? Was $25,000?
Matt:
Last month was $28,000.
Dr. Jim Dahle:
So, you just got a $28,000 a month raise.
Matt:
Right, right.
Dr. Jim Dahle:
What are you going to do with that?
Matt:
Well, we just had our son about a week ago actually. He’s just a week old and so I know a lot of that’s going to go to a good amount of diapers that we have to buy because it seems like you can never have enough.
Dr. Jim Dahle:
I don’t know, with $28,000 a month, you can probably have enough. You can probably have a whole room in your house full of diapers.
Matt:
Yeah. Baby formula is expensive. That’s new to me. But yeah, I think the goal now is to start making that appreciate even more. I made some mistakes, like I said, with the stock market previously. I think I’ll be a little bit more risk averse this time and do things that are a little bit more logical, like more index funds unless, “Hey, this stock sounds good, let’s try this one.” My dad is a financial planner, so he’ll be able to help out that too.
Dr. Jim Dahle:
Did you tell him what you were doing with your stocks?
Matt:
Yeah. He would laugh at this because he’s the person that invested it for me. So now he’s going to get a bad name. But I had told him what stocks to buy, and much to his chagrin, he had agreed. He was like, “Listen, you’re really chasing smoke here. I don’t think this is a good idea, but if you want to buy this one, we can buy it.” And that’s what we did. So I’ve learned my lesson.
Dr. Jim Dahle:
Yeah. Well, it’s good to learn them early with relatively small amounts of money, I’ll tell you that. Okay. So, what does your spouse do?
Matt:
She works in IT. She was an engineer for a while and then switched over to an IT position.
Dr. Jim Dahle:
Okay. So, what has your household income been over the last three years or so?
Matt:
Starting out of residency, my first position was about $260,000. That was in the Philadelphia metro area. And then I had this desire for a long time to make a go of it out in Seattle. We moved out to the west coast a few years ago. And I took a new position out there at about $310,000 with a decent amount of call I was doing at the same time. I would say that as I’ve accumulated raises and I took an outpatient medical director position that increased my salary even more. In total, I was probably clearing $500,000 a year myself.
Dr. Jim Dahle:
Wow.
Matt:
And then on top of with her, she’s about $130,000. So, we’re about $630,000.
Dr. Jim Dahle:
Okay. I look at salary surveys all the time. The average psychiatrist is not making that much money.
Matt:
Right, right.
Dr. Jim Dahle:
What advice do you have for somebody who’s making average psychiatrist money and wants to make money like you were making, or you are making?
Matt:
The good thing about being a psychiatrist is that it’s one of the professions where if you want to work more, there’s always opportunity And you can do a lot with time that you have, which is one of the reasons why I enjoy the specialty as it is just that it affords you a lot of flexibility.
One of the things that I did is that we have set numbers of patients that we have to see per day. A census that’s required. You do have this in internal medicine, psychiatry, everyone’s got a census. And I was seeing those people relatively quickly per day. I would find that I would have a decent amount of time the rest of the day that I felt idle.
These student loans were just burning a hole in my pocket. I was like “Let’s take on another position to get some extra money to throw at it.” So I took a position on a telehealth platform that allowed me to just whatever hours I had I could just put in and start seeing more people. I know a lot of people to go into academics and such. They start with lower amounts, but with psych, your time is your best asset because we’re not working crazy hours, we’re not doing calls, we’re not doing 14 hour shifts all the time. And so, for me, getting done at 01:00, 02:00 in the afternoon allowed me the rest of the day to be able to, if I wanted to pick up some extra hours to earn a decent amount of telehealth too.
Dr. Jim Dahle:
You guys are making about $600,000. You’re probably paying $150,000 in tax. You’re putting $300,000 towards student loans. So, you’re living on something like what? $150,000 a year or something like that?
Matt:
Yeah, thereabouts. Thereabouts. Right.
Dr. Jim Dahle:
Back in medical school, you’re borrowing money.
Matt:
Yeah.
Dr. Jim Dahle:
It starts adding up. What were your thoughts about it?
Matt:
Avoid the website at all costs.
Dr. Jim Dahle:
Student loan website or the White Coat Investor website?
Matt:
No, the student loan website. I think at the time my servicer was through Nelnet, and I was making an effort every day to not log onto that because I just couldn’t stomach how much it was ticking up. I went to a DO school so I had a pretty significant loan amount I was taking. Plus I was in Los Angeles, so I was taken at the max loans, which still weren’t covering my living expenses. I took on loans on top of that to help cover living in Los Angeles. As the years wore on and I got into residency and then came time to start paying some back, once I started seeing that number go from $350,000 to $400,000 up to the max of $460,000, I was just like, “I don’t know how I’m ever going to do this.”
I saw a statistic once online that the average doctor pays off student loans maybe around 13 years. And so, I just assumed that it was part of me for a long time, and that maybe in my late 40s, I would be able to pay it off. But once I started throwing significant chunks at it, it was like, “Well, all right, this is doable if I really just make a concerted effort for a few years and get it out of the way.”
Dr. Jim Dahle:
When was your financial awakening when you decided, “You know what? I’m going to take control of my finances. I can spend less, I can pay off debt.” When did that happen?
Matt:
I would say probably my late third into fourth year of residency. Believe it or not, a friend of mine, her husband, was a physician. We had went to college together and she had told me, “Hey, have you ever heard of the White Coat Investor podcast?”
Dr. Jim Dahle:
That’s what did it, huh?
Matt:
I was like, “No, I haven’t.” And I started listening and I remember I had taken my first job, you get this nice paycheck and you start having these ideas of, “Well, I’ve waited so long to be able to do these nice things, I can do all these things again.”
And I was listening to a Milestone to Millionaire podcast on the way to work, and I was at the same time just thinking about lifestyle creep. And I started to think “This is a really bad idea. This will feel exceptionally worse to start spending money on frivolous things when I know that I have this giant looming debt figure ahead that I had to take care of.”
I was like, “You know what? I got to start really putting my head to the grindstone and just getting it done.” And so, there was about a six month period after I started the first job where I was spending probably what I shouldn’t have. And then around January of 2021 is when I got serious about it. That’s when I refinanced and I made my first loan payment in February of 2021.
Dr. Jim Dahle:
Okay. There’s somebody listening right now that is like you were in 2021, sitting there looking at $400,000 or $500,000 in student loans, feeling a little hopeless, a little desperate thinking “Maybe I’ll have these to my late 40s, at least 13 years anyway.” What do you say to that person?
Matt:
It’s easy to make mistakes, and it’s okay to make mistakes. There’s no perfect way to go about paying off loans. But as I tell my patients all the time, especially in psychiatry, consistency is key. And I think as long as you stay the course and keep doing the same thing over and over, pretty soon it’s going to start making some headway. And I think with loans, that’s especially true because that number gets insurmountable at a certain point. When you take a look at it, this massive figure that is laughable. It was laughable. Once I saw it, I was just blown away.
But I think once you start making additional payments and you see going straight to principal and you’re like, “Oh, okay, this isn’t as bad as I thought.” And it starts to pick down. My biggest goal was I want to see $400,000 go to $300,000. And then $300,000 go to $200,000. And then $200,000 go to $100,000. And then it was like, “Hey, I’m not in six figures anymore.” And I went out to dinner with my wife. I was like “We’re not six figures with debt anymore.” It seems bad at the start, but I feel like it’s the first initial payments where you can pay a chunk. It starts to feel like you’ve taken off a lot of that armor that was on there, and it starts to feel a little bit more doable.
Dr. Jim Dahle:
How much alcohol did it take to steal your nerves to add it all up the first time?
Matt:
Yeah, that’s a good question. Again, I avoided the website forever. And we did those recertification sheets that you had to send in to. I was doing income-based repayment, so the amount of money that I was paying during residency was like $150 a month. It was pointless, realistically. By the time I finally updated my password and logged into Nelnet, I remember just my heart sinking being like, “Oh my God, I had no idea it was this bad.” Which is the problem, because if you don’t stay on top of it, it can get away from you really easily.
Dr. Jim Dahle:
I have met orthodontists seems like they are the worst, but that it did get away from them. They ignored it for a few years as an attending, and it got over seven figures. That is a legitimate concern.
Well, very cool. You should be very proud of yourself. You’ve done something incredible. You’ve worked very hard, you’ve kept your spending to a reasonable amount, and you became not only financially literate, but financially disciplined. And you should be proud of yourself. And I’m proud of you and thank you so much for coming on the Milestones podcast to inspire somebody else to do the same.
Matt:
Of course, I’m happy to be here. And I will say that about a year and a half ago, I kept telling my wife, “I’m going to be on this show. I’m going to use this as motivation. I want to talk to Dr. Dahle about how much I paid off because it was something that was a goal of mine. So, I’m happy to be here.
Dr. Jim Dahle:
That’s pretty awesome. We’re actually recording four of these episodes today, and you’re the second person to mention it. That was the motivation, was to come on the podcast.
Matt:
It was, it was a drive.
Dr. Jim Dahle:
If that motivates any of you else out there to do this, please pay it off, we’ll bring you on the podcast. I don’t care if we got to run 20 of these a week, we’ll use it to motivate you to pay off your student loans.
Matt:
Definitely.
Dr. Jim Dahle:
Cool. Well, thanks again for being with us.
Matt:
Thanks, Dr. Dahle. I appreciate all you do.
Dr. Jim Dahle:
All right. I hope you enjoyed that interview. My favorite part is when I asked him what he’s going to do now with his extra $25,000 or $28,000 a month, and he thinks he’s going to buy diapers with it. I don’t think he’s the one in that household buying the diapers as the impression I’m getting. I mean, don’t get me wrong. Diapers and formula are expensive, but they’re not that expensive. They’re going to be able to do some pretty awesome stuff with that income that’s now been freed up. I love the focus, I love how well he demonstrated how hard this is in the beginning, to actually go look at your balance when you have one of these really high student loan totals and to get started and to find that motivation and to find hope.
And so, I hope this podcast helps you to find that hope for those of you sitting in a hole like this. The longest journey starts with one small step. How do you eat an elephant? One bite at a time. You got to get started, you got to get started. There is an end. There is light at the end of the tunnel. You can do this. He did it. You can do it. Yes, it’s going to take hard work, it’s going to take discipline. Hopefully you can make fewer mistakes than he did and maybe do it even faster. But this is doable.
FINANCE 101: REBALANCING YOUR PORTFOLIO
All right, I promised you at the beginning we’re going to talk a little bit about rebalancing. Okay. So, why do we rebalance our portfolios? Well, three reasons really. The first one is risk control. You’re returning the portfolio back to your desired amount of risk you want to take into portfolio.
The second one is, it’s possible to get a rebalancing bonus. When investing that you’re trying to buy low and sell high, but rebalancing actually forces you to do that. Because you are putting your money toward what has done most poorly recently. And so, you’re buying low. Sometimes you have to sell something to rebalance. A lot of times you can just do it with new money, but sometimes you have to sell. So, you’re selling high and buying low.
And the last thing is it gives you something to do with your portfolio. For those of us with these know nothing, set it and forget it static asset allocation portfolios like we know we’re supposed to have, it gives you something to do. And I think that’s good because it keeps you from tinkering with the investments because you’re like, “Oh, all right, I got to do something. I got to rebalance the portfolio.” And so, I think there’s some benefit there.
There’s really two schools of thought to when you rebalance your portfolio. The first one is you rebalance it based on time. This is the way I rebalance my parents’ portfolio. Every year in the spring we rebalance it. If it’s a little out of balance or whether there’s a lot out of balance, we rebalance it. I think it’s usually April or March that we do it. And so, you just do it based on time. Maybe your birthday, maybe the end of the year, whatever. That’s the time when you rebalance your portfolio and you bring it all back to the original percentages that you set up in your written investment plan. Maybe that’s 30% US stocks, maybe that’s 20% international stocks, maybe it’s 10% real estate and maybe it’s 40% bonds. I don’t know. Whatever your asset allocation is, you should have those percentages written down and you rebalance back to those percentages.
This is just a little spreadsheet problem. And if you don’t know how to use a spreadsheet, open up Excel, open up Google Sheets, figure this out. It’s not that complicated. If you truly can’t figure it out, if you cannot use a spreadsheet, you honestly have no business managing your own portfolio. You need to go hire a financial planner. We have a list of good planners, good investment managers at whitecoatinvestor.com/recommended. You should hire one, but it’s not that hard to figure out a spreadsheet. You got through medical school or dental school or law school or something. You can figure out a spreadsheet. You don’t have to know everything about Excel to figure out a simple spreadsheet that will tell you how much to buy of one thing and how much to sell of another thing in order to rebalance your portfolio.
All right, the second one. One is you rebalance based on time. The second one is you rebalance based on events. For example, your portfolio gets so out of whack, that’s an event, now it’s time to rebalance. So, here’s how it works. A lot of people use what’s called the 525 rule. If any asset class is out of its target allocation by a gross 5%. So if you’re saying, you’re supposed to have 30% in US stocks and you now have 35% in US stocks, that’s a trigger to rebalance the entire portfolio. The 25 part is a relative 25. For example, let’s say your portfolio calls for 10% in REITs. But REITs have fallen in value more than 25%. So you now only 7.4% of your portfolio is in REITs. It’s time to rebalance the portfolio.
Those are kind of the two schools of thought. As far as time goes, you’re not supposed to actually do it that frequently. The studies showed that the best frequency for rebalancing is actually every one to three years. So, you don’t have to be doing this every month. It just doesn’t matter that much and you’re probably hurting yourself. You’re losing a little bit of the momentum of a typical asset class.
How do you do it? Well, first of all, it’s generally not a good idea to have the exact same asset allocation in all of your accounts. You don’t want to rebalance your accounts individually. You want to look at it all, all the money geared for retirement anyway as the whole enchilada, one big portfolio, and do it all together.
Step two is make the chart. Make the chart in that spreadsheet. Maybe one column lists the asset classes. The next column lists your target allocation. The next column tells you your current allocation and then the final column tells you the amount to buy and sell.
And then the next thing you do is you got to put in the actual trades to rebalance. The first thing to consider, especially if you have a taxable account, I guess only if you have a taxable account, is any possible tax losses you can harvest. If you have money that is in a taxable account that has a loss, you’re probably making a mistake. You should sell that investment and buy one very similar to it, but not in the words of the IRS substantially identical and capture that tax loss. You’ll find that useful on your taxes. Up to $3,000 a year of capital losses can be used against your regular income and an unlimited amount of capital losses against capital gains.
And then the next thing you do is you use new contributions. And I’m halfway through my career, maybe more. I’m still just rebalancing with new contributions. I almost never sell anything to rebalance. I just aim the new contributions at whatever isn’t doing very well. And you can do that I’d say most of the time. Certainly in the beginning, your contributions are going to be enough that you can do that.
The next thing, particularly in a taxable account, if you don’t reinvest your dividends and capital gains, you can use that money to rebalance. You do need to be careful about the cost of rebalancing. If you’re paying a bunch of commissions to do this, you want to minimize how often you’re doing it and be aware of taxes. Of course, when you can you want to rebalance inside IRAs and 401(k)s, tax protective accounts, because there’s no tax consequences to buying and selling there. Whereas if you sell something with a gain in your taxable account, there can be a substantial tax cost to doing that.
Another thing to keep in mind with this rebalancing is don’t go crazy about perfection. Because the day after you rebalance, you’re not going to be perfectly balanced. So, does it really matter if you got perfectly balanced the day before? It really doesn’t. Just get them back close to your original allocation. Really, a portfolio that’s 60% stock is not going to perform significantly differently from one that’s 61% stock. You don’t have to go too crazy about doing this.
You can also take advantage of automation. For example, if you only have a single investment account, all your money is in a Roth IRA for instance, you could use something like a Vanguard Target Retirement account fund or a LifeStrategy fund that will automatically do the rebalancing for you. Now, I wouldn’t recommend that in a taxable account, but in a retirement account it works great and you never have to do the rebalancing yourself. All right. I hope that’s helpful and taught you what you need to know about rebalancing your portfolio.
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All right, that’s it. That’s it for this episode. I hope you enjoyed it as much as I did. It’s been wonderful to be with you and I hope you enjoy this podcast listening to it as much as we enjoy making it to you kids in the audience. I hope you stuck it out and got to the very end, and that your mom or dad lets you now listen to something a lot more interesting than this podcast. We’ll see you next time on the Milestones to Millionaire podcast.
DISCLAIMER
The hosts of the White Coat Investor podcast are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.
