Money Meets Medicine Podcast
MMM 60: Ryan’s Rules to Personal Finance
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In the last episode we talked about my rules of thumb for personal finance in Jimmy’s Rules to Living Healthy and Wealthy. In this episode, it is my compatriates turn to lay down his rules of thumb in Ryan’s rules to wealthy living. Come tag along as I make fun of Ryan, and we discuss some helpful way to think through common financial situations for doctors and their families!
Today You’ll Learn
- What is the 50/25/25 Rule? And how do you apply it?
- How comparisons can be deadly in personal finance.
- The balance of saving for tomorrow while you live today. Not “someday”.
- And more!
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Jimmy Turner 0:00
Last week we talked about my rules. This week we get to destroy. I mean, talk about Ryan's rules.
Ryan Inman 0:07
Jimmy Turner 0:08
can't wait. You can't wait, me neither. I don't know. Let's go.
Welcome to the money meats medicine podcast where we talk all about the personal finance topics you wish you would learn in medical school. I'm your host, Jimmy Turner. And here's your co host, who hates all country music, except that he admits that he really, really likes Rascal Flatts Ryan Inman.
Ryan Inman 0:35
Yeah, about that. That's actually true. And it's the unfortunate hidden secret deep down. I really don't like country music, but I actually enjoy Rascal Flatts and I picked the wedding song like unique first dance or whatever. And my wife really likes them. And so they were the wedding song too, but not a fan of the rest of the country. But they're pretty good. We only speak the truth on this podcast. Well, I mean, Jimmy embellishes he thought his rules were better. So before we get in the show, here's a message from today's sponsor, which is med evolve a company that empowers physician practices to work smarter with data driven services. If you're tired of dealing with headaches, like finding and retaining quality billing staff, maybe high turnover, maybe have limited resources, many practices are opting to outsource all or at least part of their billing process to help relieve the burden on internal staff, free up those resources and reduce overhead costs. For those who wish to keep the billing in house, it's critical to have solutions that provide automation and give you the ability to monitor staff productivity and effectiveness, especially with remote employees. So many evolve. Our sponsor today can help you leverage data and AI solutions that bring answers to the forefront and take the guesswork out of revenue cycle management. Let them show you how to have this great company help you work smarter, reduce the cost collections, and to actually get paid on time. Check them out at doctor podcast network.com slash med evolve, m Ed, ev llv. It's also in the link of the description of the show right now. So I've got 10 rules, I'm gonna throw even a bonus one in there, we're gonna try to pack everything in. We don't want this show to be two hours long or three hours. I mean, I'm pretty sure some of these rules Jimmy could talk days and days in. But we're not going to do that. We're gonna keep them somewhat brief. I think let's try to keep it to like three minutes or rule if we can, Jimmy. You ready? Yeah. All right. So my first rule, I think, is super well known as we talked about it all the time. And it's the 5025 25 rule. And what I'm referring to here is the way that you spend your money. So once, let's just say that $10,000 hits your bank account every single month, that is your net pay from work 25% goes to paying yourself first 25% is towards your variable costs. So think like entertainment, or just fun money, things you're going to do or possibly spend in the future. So your really nice vacation that we're going to take once everyone's vaccinated, and we feel comfortable that his future variable costs. So as you're saving for that, that belongs in that 25% of your variable spending for take home pay, and then 50% towards your fixed expenses. That would be your student debt, the minimums on all the debt payments, that'd be your rent or your mortgage. And that's where kind of those buckets come through. So we differ a little bit on their rule. But I really like talking about take home pay, because someone could figure that out by logging in their bank and looking for three seconds on what they actually take home. And if you apply the general rule about how you're saving, then this is how we would break it out.
Jimmy Turner 3:39
So I think my biggest question is going to be because 25% savings rate right off of take home. So when he gets 25% off of take home, does this number include paying down debt? Or is this the money that you're investing for your future?
Ryan Inman 3:54
Absolutely. It's a great question. So the way we look at is you've got minimums on your debt payments, say your student loans are $500 a month. And I know most of you were like, Oh, I wish right, that'd be great. Well, let's just say it is but you decide that you want to pay $750 to your student debt, right, you're gonna make an extra $250 a month of payment, well, part of that 25% take home again, let's use the $10,000 of take home pay, that would mean that 20 $500 needs to go to paying yourself first investing whatever it may be, it's things that positively increase your net worth. So there's two ways to increase your net worth. One is to save money and invest that money in your asset side of the balance sheet grows. Or there's the other way, which is you have liabilities and you need to pay them down faster. So the $250 extra student loan payment would belong in that pay yourself first. Other things would be like your HSA, your backdoor Roth IRA contributions 6000 a year or 12,000 depending if you have a spouse or not, what is not included is your 401k or your 403 b the employee side of that. So That 19,500 off the top, unless you are a resident or a fellow, your new attending or a mid career attendee that just needs to go out automatically. You're so far behind everyone else when you originally start, right and zero assets, massive amounts of debt 10 plus years later than everyone else started, that's just a given like that is the layup the slam dunk, you've got to do that. But everything else will come essentially, from that 25% pay yourself first,
Jimmy Turner 5:28
I got you. So basically, you end up coming pretty close to 30% off of gross because you're already taken out the 401k or the 19. Five that's taken out pre tax, it depends on the math. And the higher your income, the more that gets off, or the lower you make if you're in a lower paying specialty or you work part time, like that number
Ryan Inman 5:44
might be much larger, just depends. So my second rule is about creating positive habits that will yield positive results that you want, right? So if you have really poor eating habits, it's going to mean obviously, no surprise, when you start gaining weight, if you have really bad financial habits is going to be no surprise that you're going to either feel poor or will actually be poor, and not able to save not able to do things. I can't tell you how many times Jimmy I've heard it is man, I don't know how anyone lives on less than $15,000. I'm sitting here, do you remember when you were in training, and you made that in a year, it was what it felt like, once you start making an earning more money and lifestyle inflation kind of kicks in. It's really hard to stop that train, it's really hard to say, oh, I've enjoyed all these nice things and have these nice cars and a big house and Oh, crap, I got financially literate. And now I need to figure out how to make all this work and then cut everything back. It's super tough. So if you start early, you starting to create positive habits, then the positive results will just follow. It happens. It doesn't happen overnight. But it will happen.
Jimmy Turner 6:47
Yeah, it was interesting. I was walking back from the park just a minute ago with my little girl. And her school was playing this game. It was called life and not like the board game life. But like they all got different jobs. And they were given different amounts of money every month. And so she was given $12,000 a month for being the politician, which she got the job. And so she got $12,000 I said, What did you do with it? She's like, I bought a house. Car. And I also stuff and I was like grace, we talked about this? What do you do with money when you get paid? They wouldn't let me save it dad.
And I was like,
What do you mean, it would let you save it. That's how you win at life. I was like this game's bankrupt, to talk to your teacher.
Ryan Inman 7:21
It's so funny. That's amazing. Honestly, we need to start trading our kids like little adults and teach them about money. And I think that's a crime. If they're teaching them not to save and having positive habits, I start as early as you possibly can and pass it down. Right? If you never received positive behavior and habits or in a healthy relationship with money from your parents, that's okay, learn now, now's a better time than any, but then pass down those habits to your kids super important. My third rule here is no one should ever care about your money more than you do. And I can't tell you how many times that we work with clients or we hear it from different people or I'm out and about and naturally just conversation around money happens around me because I'm asking these questions or people always asking me questions about money. And it's Oh hired this person to take care of it. So they do it for me. It's like no, no, no. Sometimes I like our team and myself, we care more about our clients while being in financial well being and money than they do. And that should never be the case. No one should care more about it. You need to understand what you're doing, why you're doing it, why you get up and go to work and sacrifice time with the family and all these things. And when it comes down to it, don't just be like, oh, money's just so confusing, I'm just not gonna deal with it. That's just never a good solution. And no one will ever should ever care more about your money than you do. Because they're not going to do a great job compared to how well of a job you could do for yourself. But if you do work with someone, please don't have the mindset of I'm just going to give it to them. And they've got it.
Jimmy Turner 8:50
I can't tell you how common this one is. Man, we are talking about the groups that I break people up into right that they do yourself crowd the dot, the i's cross the T's that want to work with somebody but want to make sure that recognize cross there's T's dotted. That's how you need a planner when you start crossing your eyes and dotting your T's. So the dot the i's cross the T's group, you are in the process of learning about it, you probably know enough, but you also won't check on and then that third group that I was talking about the people that just want to outsource everything, like they outsource their car maintenance and their lawn care and maybe their grocery shopping. A lot of people want to outsource their financial stuff. And I completely agree with you that no one should care more about your money than you. But unfortunately, I would even venture to say I would argue that the majority of physicians do not care more about their money than someone else and that is the reason why they will go get a financial advisor they will go get insurance from the wrong person. And they'll get advice from the wrong place because they just don't care enough to check into it. And then five years later, they're like, yeah, so I've got this whole life policy or this permanent variable life insurance. Paul, like we get those questions all the time. And that comes from a trusting people.
Ryan Inman 9:54
That's exactly what it is. Look, I am a financial planner is my day job. I help physicians all across the country with their money. I'm not saying don't do that. If you need that, and you want some more assistance, like, Great, that's fine. Not everyone needs a planner. But you don't also have to always do it by yourself. But if you decide to hire someone, please don't just say, okay, Ryan's got it. We're good. Now, that's not the case. Like you need to be responsible for your financial lives. And make sure that you're checking in regularly that you're doing the right things, because you build good habits, right? positive results will come with it. No one just says, Oh, I saved once and I'm a millionaire. It's the habit of saving, and caring and doing and looking at your finances that will make you wealthy. Totally. My fourth rule is don't live in the monthly payment mindset. It is one of those something gets said and it makes your skin like boil and you're like, ah, please don't do that. Right? Oh, I can afford the Tesla at a 12 $100 payment, oh, I can afford to buy this really nice house because it costs 6000 a month and I make 15. Now, of course, I can afford that I can afford XYZ vacation because it only costs this much. That is not the case. If you can't afford to buy the $90,000 Tesla, with all cash, then what makes you think you can afford to buy the $110,000 Tesla that took you five years to pay off? You can't afford it. But you get trapped up into this monthly payment mindset where I think honestly, it's student debt is what really screws this whole relationship with money out because you like I'm borrowing $300,000 and I'm gonna pay 2000 a month, and that's the most I can afford. That's my monthly payment. And then you apply that everywhere. I think monthly payments are in viewing your finances from a monthly standpoint is absolutely critical. Right? To look at what's coming in what's going out. But when it comes to can I afford something? You do not look at it as well, this is the payment therefore I can afford it. You would look at it. Well, this is the total amount. Do I have enough reserves to pay for this? If not, save for it monthly, then buy it. And the only two things that don't follow that rule? Are your student debt and buying a house. Everything else should follow that rule.
Jimmy Turner 12:03
Yeah, I was gonna say that I think the two drivers are the student loans plus the mortgage because both of those are such large numbers usually that people start paying monthly payments. And I totally agree that after that standpoint, like I can't tell you how much freedom it's provided my family paying off all of our debt. Now we still do have a monthly payment on our mortgage, but we refuse to pay monthly payments on anything else. So you know when we bought expensive workout equipment or peloton junkie, so we bought a bike and a tread, they're paid for in cash, we bought cars, they're paid for in cash, and not having that monthly payment over our head for something that is extremely freeing. And so I will say that's kind of interesting, cuz I've seen people go backwards, like they pay stuff off. And then they're like, Oh, yeah, but the Tesla is really nice. So I won't be that bad. And they'll actually pay stuff off and then go back into the monthly mindset. And it's the second year in it, you're like shitting on that.
Ryan Inman 12:49
Yeah, immediately buyer's remorse. Speaking of buyer's remorse, this next one will cause you to have it for rule number five here is insurance investments or investments, never mix the two. Alright, so if you hire someone, like we're going to talk about here in our listener question that came in, you need disability insurance, you need term insurance, like it is very rare that you don't need one of those. Now, maybe if you don't have any dependents, maybe you don't need term, but you definitely need disability coverage. Even if you're married to another physician, they are not your disability policy, you still need one, right? Where the issue with this comes in is when you pick the wrong person to assist you. And they're selling you a bunch of permanent insurance, or they sell you term with a conversion writer, which Northwestern Mutual is famous for. And then calling you two years later going, Hey, Jimmy, we were reviewing your insurance. And we think we need to convert some of this to permanent insurance, not only were you paying more money on the premium, because you have that conversion rider inside it. Now you're starting to confuse the insurance need of protecting your income with the investment side of I'm going to be paying myself inside these things. And I can pull the cash out and they have 1000 different ways that they're going to pitch this they spend 10s of millions, if not maybe even hundreds of millions of dollars in sales, training for these people to basically play off your emotions and make you make this decision that they shift from it being insurance to protect you. Versus now it is now an investment in your future to help your family with this investment. And they are absolutely not further from the truth. And make sure that when you are investing money, you're buying the actual stocks and bonds yourself. It is not an insurance policy to protect you for your entire life. You're a physician or maybe you're married to one and in a physician family. The last thing you need is an insurance company to take care of you for life. No questions asked slammed the door shut.
Jimmy Turner 14:41
Yeah, we've talked about this point so many times that I'm not going to belabor it other than just to say that this in my mind is gospel don't mix insurance and investing. So I mean, I cannot tell you the number of emails is probably the number one it's heartbreaking. We get about stuff is like hey, you know what I finally started looking at this stuff and I finally realized that My variable life insurance policy, my whole life policy, my permanent life policy is not the right thing for me. And then they go back and like the people still read them the riot act about all the reasons that it's a beautiful product, even though it's not the right thing for them, so just don't do it. And I'm super excited about rule number six, I started cheating. I'm looking at your rules now. But
Ryan Inman 15:18
Mother of God, how are you cheating? stop cheating. Alright, rule number six for the cheater in the group of two of us. Basically, the rule is to earmark 1% of your gross income to investing in yourself. Now I like net income, but I knew talking to Jimmy, he would translate into gross income. So I'm okay with gross or net, but earmark 1% of your income to invest in yourself. And these would be things like books, this might be subscriptions to certain periodicals it could be the Wall Street Journal can be whatever that is helping you with your financial lives, it could be something that's helping you it could be actually having a subscription to a gym, it could be yoga, it could be anything that is basically going to better yourselves, I am a nerd. So I like reading and listening and learning more about finance and those type of topics. Not everyone is like that, my wife would argue I should probably invest more into learning about eating healthier and working out more. So that might actually need to come into play. But what we do is we earmark for each of us 1% of our income to invest in things that really will benefit ourselves. And I buy a lot of books, a lot of audible books, I listened to a lot of things. I buy a lot of apps on my phone, not expensive 100 plus whatever dollar like we're $1 $2 $5 here, but things that will allow me to remember certain things, I have a software called read why's that it pulls in all sorts of different little clips, there's a new app that costs and I think it's six bucks or $10 called air and it's a new podcast player that it's fascinating. Jimmy, we haven't talked about it. But you can actually highlight and clip a certain portion of it and it'll take it and save it to you in an audio. So let's say Jimmy because he won't actually do it. Let's say it's me. And I come up with some really good nugget that you like, oh, Ryan dropping knowledge bombs, we love it, you can click the button, it rolls back and you can change it to 15 3045 seconds, whatever. And it'll save that clip. It's a really cool software I just found, but things like that I don't bat an eye, I have it in my budget, I look for it, and it's done invest in yourself, it's the best thing I think you can do.
Jimmy Turner 17:17
Yeah, I've only got two comments, one that you made something off of gross income, which I think is great, because you love your take home pay stuff. And the second is that I might start here at 1%. But I think like my 10% rule we talked about last week. This is one that I think over time as you pay down your debt can grow because particularly on things that you get a return on investment for I spend a lot more than 1% on investing in myself paying for courses or paying for books or paying for subscriptions or paying for coaching, like I do a lot of things to invest in myself and my family that I totally get a very measurable return on my investment. And so I view this almost, I love that you use the word investing in yourself because so many people view this kind of area as spending money, and it stops them from doing it. Like you were totally worth the investment. Please spend some money to improve yourself to find happiness to find balance or whatever tools that you need to do that. So 100% agree and I love that use the word invest. I was really looking forward to making fun of you on this one, and you use the right word.
Ryan Inman 18:16
So to save it for another one, that's fine. Look, let's be real. If we just strip out all the BS, like when you have investments, and stocks and bonds, you're still investing in yourself, that money is going to take care of your future self. And what you don't want to do is have your current self rob your future self, you don't wanna do that. So you want to make sure that you're saving, but part of this is spending money. Like there's no qualms about like you are spending money, but you're investing in yourself and earmarking that money to do that and giving yourself permission to do that ahead of time. You don't necessarily know if it's a book a course or whatever. It doesn't matter. When you go in and set up your budget. You're marking that money and saving that. That's where I come with it. The seventh one here I've got is to never fall in the trap of comparing yourself to what others own or what they think. And it's really common that you walk through the doctor parking lot. And you like Tesla, Beamer, Tesla, Mercedes, Tesla, Tesla, Tesla, Tesla, and the other Grandpa, you know, 100 Yeah, and then there's Jimmy's truck, but you look at me like my old Saturn over there doesn't look so cool. Like, maybe I should be like all of them. And maybe I need to look at getting a new car. And if the car is your why you're a big car guy or car gal. Great. save money by the car. Right? That's your voting every time you spend $1 you're voting for what's going to make you happiest, right? And so if you're saving money and going to buy a car, that means that you can't maybe take that really nice vacation or if you try to do both those then you really can't have a really nice house. Give or take and you can only sign the dollar. One job right? But if you start looking around and going, oh my goodness, look at all these people. They have these really nice houses like you go over to another tiny house and it's 5000 square feet and this like massive doctor McMansion. You're like, well, immediately I'm unhappy with what I have because my 1600 square foot house here in San Diego is a piece of crap compared to that. Just don't compare like maybe that's their Why? Or is that is absolutely not my why my house is my house, we had a big house we downsized just because it was too big. We didn't like it. We like being in a smaller place. Just don't fall into the trap of comparing to what, you know Dr. Jones's are doing, because the only thing that's going to end up happening is you're going to feel bad, potentially causing anxiety, worry, fighting relationships might be worse when you're starting to say, Well, they've got this and why don't we have that? It's just a horrible mindset to be in. And usually it ends up really crushing your financial goals, and ultimately, your finances.
Jimmy Turner 20:41
Yeah, so I think rule number seven is really don't keep up with the Joneses. And I will say that when it comes to this, particularly when you're early out of training, just accept and love and say this mantra to yourself just all the time, because it's going to be helpful for you. But as you do take care of things. I 100% will encourage you to spend money on things like once you do figure out Oh, traveled my thing, travel, spend money on it, and maybe other people will compare their trips to yours, but you can't do the travel and the car and the house and the private school and do all those things. Oh, and by the way, save 25% Ryan recommended post tax at the beginning of the show, plus the you know, 401k contributions. And I'll tell you that helped me tremendously that guilt free spending we talked about last week, as I am a car guy, so you're talking to me and I'm like, like my kryptonite, right? So I'm totally gonna buy a 2019 rF MX five Miata in the next couple of years. And I'm gonna keep my truck to I'm gonna have two vehicles and people are gonna look at that and be like, what are you doing? EDI personal finance. That's my thing. I live in a super low cost of living place and don't waste money on a bunch of other stuff. And we don't travel a ton either.
Ryan Inman 21:45
Yeah, unfortunately, though, is society the outsiders, quote unquote. And we're gonna look at a cigar typical doctor, he doesn't have just one car. He has two cars, they really think you're Mr. moneybags over there swimming like Scrooge McDuck and your gold coin. Little do they know that traveling is not your thing, you're probably not spending much. They're where they might be spending a ton. And you're probably cutting back and other things that they likely aren't. And you're allocating your spending money in a way that makes you happiest? Who cares is literally taking care of everything.
Jimmy Turner 22:13
I think that's what some people forget when it comes to this is there is a time where you can let loose the purse strings a little bit more and live life like an attending, like we've talked about in prior episodes. And I think that's important to recognize early on. And I cannot tell you how fundamentally important it was for my family for the first two or three years to not trap ourselves, but looking at other things. And we absolutely did that with the exception of one or two things, and then otherwise destroyed our debt with like, just ruthless abandon. It just was something that we had to do. But now that we've done that we put the work in Yeah, I'm sure it looks like that on the outside. But that's because we put the work in early, so totally.
Ryan Inman 22:50
Alright, so I'm gonna say we're now eight goals in and like 20 something minutes in, and Jimmy's agreed with every single one of my goals. So I'm just gonna say my goals are probably better. But let's go to Goal number eight, right? And this is really to cut out the someday syndrome. I also talked about it on the show all the time about Don't be an ostrich, right, don't shove your head in the sand and be like, ah, figure it out, someday, someday will likely never come. And we see it all too often in different things. And these are the stories that literally crushed me when I see them. Or when I hear them, or someone's telling me this, hey, look, I've been listening to show for three years, this is fantastic. I knew we needed to do XYZ by this insurance policy to get us covered. And now all of a sudden, I'm disabled and I can't work, you know, money hours, and I never got that I knew I should have what can I do now? Oh, literally like a knife to the gut, you
Jimmy Turner 23:40
can go back to the future with your fancy car and a crazy scientist. And go back to the date where you made those mistakes. 80 miles an hour or good, right? no joking aside, though, this is the one where we hear it a lot. Or hey, I
Ryan Inman 23:53
know I need to do some estate planning but like, I just I'm too busy. I'll do it some other time, that time likely will never come you're just gonna keep kicking the can down the road you're gonna look at and go What are the things on your to do list that have been there for more than six months that are financial, write them out, you probably have them in your head, it's probably in the back your mind probably causing you a lot of like, stress anxiety that you don't even know about. literally write them down, and then just do them. Seriously, just do them because you keep kicking that can down the road saying I'll get to it someday. I'll do it next week. No, you won't just be honest with yourself. Cut someday out of your vocabulary, and just do it. You know, it
Jimmy Turner 24:27
is an interesting thing to me though, because I coach doctors, on starting businesses and on a lot of other areas of their life. I will tell you that. It seems to me one of the hardest, if not the hardest things for humans to do is to get started that someday is so appealing, because so many times you're like, oh, what if I get it wrong? What if I don't do it? Right? What if I'm a failure? What if I and all of these what ifs prevent you from just trying and realizing Oh, it's not that bad. It didn't take that long. I could just get this done right now. And so some days the way to push things down the road. rode, such that you don't have to worry about failure, you don't have to worry about a misstep. And I think that's why a lot of people put their head in the sand, in addition to the fact that they're obviously busy doctors, they've got a lot of stuff going on. So there's so many stressors on my plate right now, this is not the one that I want to focus on. And then 10 years later, they realize, Oh, that was what I needed to do. I think it's fundamentally important. Unfortunately, I agree with another one, your rules, although we're getting into some like this
Ryan Inman 25:23
next one we're gonna disagree on which will be fun, but you didn't mention one point. And it said, something around the lungs of what if I fail, what if I do this, go back to rule number seven, and stop comparing yourself to what other people own or what they think, who cares what they think, if it didn't make you happy, or if it's been on that to do list and you just you're afraid of launching right inertia, the hardest thing to do is to push and get started, then it's easy, right? creating positive habits, go back to Goal number two, create the positive habits start. And as soon as you start, you'll get going, creating those habits, positive results. And I would
Jimmy Turner 25:54
argue that in this space, it's super important not only to do that, but to actually redefine what failure is, like you trying something and it not working is not failure. It's like Thomas Edison, right? He didn't find 1000 ways that failed, he found 1000 ways that a building a light bulb wouldn't work. And he learned from that. And when you can flip the script on failure and view failure, or things not going the way that you thought that they would that expectation, if you can flip that and say that's actually a sign of me pushing and trying hard and doing things and heading in the right direction. All of a sudden, you won't be scared of not doing what other people do. Because that's not failure. That's you pushing the limits to try to really do what's right in your life.
Ryan Inman 26:33
Isn't there a book that's like something about fail fast or fail often or something like that? I can't
Jimmy Turner 26:38
remember. But there's a phrase called fail forward and coaching, which is this idea, which is that failure shouldn't stop you. In fact, it should be a goal. Like it should be a goal of Yeah,
Ryan Inman 26:45
get to it, right, fail, and then move on to the next thing that you want to try. But don't just keep kicking the can because if you don't even try, it's Hey, I really want to raise and stuff. But have you talked to your boss about it? No, then you know the answer, like it's gonna be no, because you didn't ask and try to negotiate for a raise, don't go do it. Even if they say no now and move on to the next thought maybe you need to get a new job. Maybe there's other things that you can do to increase your income, if that's what your whole goal or motivation was to try to do. But if you don't even take the initiative, don't start the answer. All right, we can finally disagree, I think on something here because my ninth goal is to just be cautious with expensive hobbies. And I'm going to pick on golf because Jimmy likes golf, and I like golf. But I actually stopped playing golf. Because it's a frickin expensive hobby, at least where I live in Southern California to just go hit golf balls on the range is 30 bucks. And I loved playing golf, it was very fun. I did it with my dad growing up all the time is amazing memories to do that with my dad. But my point here is just be cautious with expensive hobbies, they usually are cloaked as investments, oh, I'm gonna collect this thing, or I'm going to have this hobby of fixing up motorcycles, whatever it is, I don't care. You know, there's a lot of justification that happens. That's where a lot of wiggle room ends up blinds get real gray. And you don't end up budgeting for these specific hobbies. They end up overtaking some of really what you should be paying yourself first and investing for your future. And you end up convincing yourself, right you guys are we're all we're humans, we're really good at basically convincing herself of anything. And you're like, Oh, well, I'm investing in this, this is going to be worth more this hobby is fantastic. If it's not a sport hobby, let's say it's out collecting coins or whatever, okay, I'm investing in these things. As soon as you start saying investing, when it becomes a hobby, you end up getting in trouble with stuff that is like golf. Let's just keep with a theme here. It's a very expensive hobby. It's a sport. It's fun. It gets you outdoors get you good vitamin D. But it's a really expensive hobby. And there's people that spend literally six figures playing golf every single year. It's very expensive. So be cautious, doesn't mean don't do them. And I know what you mean, Zelaya, 10% of whatever you want to spend it on. Go do that, like fine. My rule though, is to be cautious.
Jimmy Turner 29:03
I just think it's so cute that you can read my mind. It's disgusting. It's always your love for Rascal Flatts.
But yeah, so
I think that I would add one word to this, which is to be cautious with multiple expensive hobbies. Because I do think that it is reasonable to have one thing we talked last week about dialing things up or down based on what your passions are. And so I think it's okay to have an expensive hobby, I think it's okay to have multiple, low to moderate, expensive hobbies. And so it's a funny thing, because, yeah, golf is expensive. And I will tell you that even though I love golf, and I will play golf as much as I can, with usually with my buddy Mike, or my buddy Sean or with my kids. That said there are three country clubs in the area, and we picked the one that cost the least and that provided the best value and actually moved out to where that places and so my initiation fee when I joined our club was $0 and the other two were 25,040 $1,000 to just join and then start making money. payments. And so if you're joining a club like that, yeah, golf can get crazy expensive in San Diego when you're playing premier golf courses that the PGA play on then yeah, it can be expensive quick. I'm not going out to Pinehurst here in North Carolina every weekend and playing and putting a couple $100 down for a round. So for us, it cost us a few $100 a month. So I'd say that golf every year probably cost us a high four figure or low, maybe like right at $10,000. max, I'd say it's normally probably between five and $7,000 a year if I had to guess about it. But then I look at my salary. And I'm like, are all things considered? Like that's actually not that bad for an IT quote unquote, expensive hobby?
Ryan Inman 30:36
Yeah, I'd argue that you should know what it actually costs one. Regardless, if you want to say I've done I know, but I'm just saying I could argue that to hearing 25 Ks a sign up is laughable. Like in Southern California, there's courses literally it's $200,000 to sign up and be a part of that course. And then your dues are $1,000 a month whether you play golf or not obviously wouldn't be showing I could afford to join even if I wanted to. But there's courses that the PGA doesn't play on, that cost $100 $150 around. It's just, it's an expensive hobby. And so the idea is just be cautious if that's your why coming back to the car guy or gal scenario doing budget for it. But don't do that end up keeping up with the Joneses or because that's what you should do. Just be careful with and be cautious around expensive hobbies.
Jimmy Turner 31:20
If this was a visual sort of thing right now, this would totally have one of those gifts with Jim Carrey, where he's like, so you're saying there's a chance use the word cautious. You didn't say not to
Ryan Inman 31:28
what was all that one in a million talk. I love it. So I debated a lot I had honestly like lots of rules that I kind of abide by and think through. And I debated whether I drive home another cash flow one because I truly believe that everyone needs to cash flow and and plan for that. But I'm gonna stick with this one. And it is that your retirement accounts and talking about your 401 K's your 403 B's, your seps, your IRAs, Roth or traditional whatever you have, that is a true tax deferred retirement account. That money should be invested in stocks and bonds based on your need and your ability to take risk. I don't care what that is, if it's 50 or 100, zero, it doesn't matter. That should mean stocks and bonds. absolutely do not borrow from your retirement accounts, do not convert them over to self directed and invest in real estate, you can invest in real estate any other way you'd like. Just don't rob your retirement accounts to do that. And I'm seeing a lot more out in the physician blogosphere and podcast areas, I'm getting asked a lot by our client just I see it more and more pop up. And it's it is absolutely the wrong way to approach investing in real estate or alternative investments, please don't do that. It is totally fine to take a small portion of your portfolio 510, maybe even 15%. If you're really gung ho, let's say in real estate, I'll pick on real estate right now. And that's totally fine to go and invest money and to do that, and actually earmark the money for it, just take some chips, quote unquote off the table, don't go all in put 90 100% of your net worth into these things. Move your retirement accounts around, borrow from them, because you're paying yourself back and I put that in quotes for people listen on the show here. It gets ridiculous. It's absolute nonsense, anything and extreme is bad. So if you're gonna invest 100% in stock, that's probably bad. If you vest 100% bonds, that's probably bad, right? It's some moderation between it. Having other investments is fine. Having real estate is fine. But please never borrow or take or convert your retirement accounts to self directed and go buy real estate in those you need to still have some exposure to the markets. And that market isn't just real estate.
Jimmy Turner 33:38
I'm not gonna add anything to that I 100% agree, don't take your retirement accounts and invest in real estate.
Ryan Inman 33:42
And look at that. I'm 10 for 10 Jimmy agreed with everything. Winner winner chicken dinner was excellent, too. So my last one that he's cheating on again. And this is just a little highlight point Jimmy can go on and on. I don't want to drone on for too much longer here. But there's 14 140 minutes in a day. use them wisely. And just say no to things that don't make you happy. It's that simple. If it doesn't make you happy, don't do it. If you're like, oh, that dopamine hit on Amazon is gonna be so exciting. Get it and then like you maybe don't open the box for a week. Just Say No, don't buy it. But in your cart, wait a day or two, then if you still want it, buy it. Right if you don't want to go do certain things. And I know we have a ton of clients that have a real hard time saying no. Hey, Jimmy, will you run this committee? Hey, Jimmy, will you help me do this? Hey, Jimmy. Sure. Sure. Sure. Right. And then you get down. You're like, oh, my goodness, I'm overwhelmed. I've so many things going on. And it's because you couldn't say no. Maybe some of this is if I said no and someone else steps out. Maybe I don't advance my career not. There's a balance. And you have to go say yes to things that make you happy that are going to really move that excitement needle for you. And if it doesn't, don't feel bad, just say no. Every time you say yes, you honestly are saying no to something else. So if I said hey, Jimmy Yeah, I'll do a second podcast with you every week. But if that means That I spend an hour or less with the family, then that means I told them no, that's not a good trade off. I used a very extreme example for a reason. But please, you have only a certain amount of time time is our most precious resource. don't squander it. Yeah,
Jimmy Turner 35:14
I say two things, probably more often than just about anything else. You say yes to one thing, you're saying no to something else. And so unless it's makes you say, hell, yes. Please say no to it.
Ryan Inman 35:24
That's all say, Jimmy's hell yes. policy in a nutshell. All right. So we had a long listener question. And we're gonna basically try to summarize a little bit of it. So let's go. Ryan, thanks for your great advice, all the podcasting and other work. They didn't say Jimmy. Yes. All right. I might have edited that out. But whatever other details. Now they love Jimmy too. I like currently a fourth year plastic surgery resident with two more years to go in residency, I took the advice and got my own disability policy. When I was in second year. He's one of the advisors on the white coat investor recommended list. And initially had a great experience. A broker called me walked through all the different riders compared the four that were good for me and I went with Northwestern Mutual, they said they check in annually and had to make some changes. But that never happened. I tried reaching out to the person on two different occasions couldn't get through and was treated like a new customer, even though I bought a policy forum, which was infuriating. The second time is when I explained it to have a phone meeting discuss, quote, unquote, life changes, and they still never got back to me. Now my renewal came up in 2021, I want to change my coverage. There's some other things I'll remove out just because they think some HIPAA stuff that we don't want to talk about, but sorry for the long winded story, but want to explain my situation, my frustrations Is this normal and dealing with a disability insurance provider? More importantly, is it possible to switch let me know your thoughts because I feel quote, unquote, covered, but frustrated with the experience. So one that is really typical, is unfortunately, with the broad base of just, let's say, putting everyone together that sells insurance, they don't really care about you after they make the initial policy. And it's terrible to say this, but it's unfortunately true. They make the most money when they sell you that policy. So they sold you a policy, let's say they made 2500 bucks on that policy. And then they get a trail for as long as you have the policy active. So if you have the policy active for 30 years, they keep their licenses, active, everything's good. They earn a little bit every single year that you have the policy active and you're paying your premiums. And that ends up being like a couple percent, it's not that much money. So when they look at instead, why soldier Jimmy, this policy at 20 $500 initial commission, and are now making $25 on Jimmy Well, I'd rather go find another Jimmy that needs a policy I can make 20 $500 on versus the $25 a year that it takes to service you. Now insurance is super archaic. So there's always a commission paid, whether it's the initial policy was sold, or the premium is due, and they're doing that. So you don't call the home office of massmutual and say, Hey, massmutual, I've got up they don't want to have someone on staff. They're paying the agent who sold you that policy, take care of all those questions. So it's up to that agent to do that. Now, you said hey, this person I talked to you, she's not giving me the time of day, even though she's on a recommended list. And I did this policy, and they're treating me like a new client, they don't remember even who I am. Absolutely switch, no questions asked that just switch that person stinks. That is gonna hurt them in the long run, because you're not going to say to your peers, hey, this person, she helped me with this and was fantastic. You're gonna say, hey, this person helped me. And she stinks, right. So it's really bad for her business model to have done that. But the good news is you can switch, most insurance agents aren't excited that you're switching to them, because they never sold you the initial policy. So they didn't get that in this case, 20 $500 Commission, but they're still going to be there to help you. Because they know that you're going to end up telling your friends, hey, this person stunk. I switch this person. And they actually talked to me, and they're fantastic. And you now know all of you listening, that when you make the switch, and they don't sell you the policy, they're not making that much money on you. We've got two people that I know like and trust that I talk about all the time, and you can go grab that at financial residency.com slash insurance. They're both on there. And lots of people switch these guys. They're also on why co recommended Jimmy recommended my recommended both great guys, so check them out. But I know you at least you feel covered. That's the important thing. But having a frustrating experience and just lack, you know, customer service or just honestly, caring is very annoying, and I would not fault you for wanting to switch coverage.
Jimmy Turner 39:32
I just wanted to add in there that sometimes when you do switch policies that there is a conflict with insurance agents, particularly when it comes to life insurance, they may want to sell you a new policy, as opposed to amending your old one. And the reason why is because what Ryan said earlier with them making more money from selling a new policy. And so when you're doing that, you want to make sure that you're really making the right decision whether that's disability or life, it'd be helpful to talk to somebody about that potentially and get multiple points of view. So absolutely agree with what you put down there. Right
Ryan Inman 39:59
Awesome. Well, thank you for emailing that question. And we appreciate you doing that. And if any of you out there want to have your questions answered, send it to Jimmy at money meets medicine comm or Ryan at money meets medicine Comm. We're happy to feature it on air, we'll strip out some of the details like we just did today, but we're happy to explain it on air. I personally cannot respond back to you via email with an answer to this. And as because I'm a registered investment advisor, I'm licensed with the SEC, I'm heavily regulated on what I can and can't say on a one on one basis. But I can say lots of different things on a one on many basis, which is why I do so many podcasts because that means I can help a lot more physicians. So if you get an email back, Jimmy's probably going to respond. I won't be able to but we'll put it up on the show. And then you can get my answer from there. So if you'd like to do that, we encourage you to email us. All right before we end the show. Remember that today's sponsor is Matt evolve. And if you want to keep your billing in house, it's critical to have those solutions to provide automation and give you the ability to monitor staff productivity and effectiveness especially like we said for the remote employees that you have so that evolve can help you leverage data and AI solutions that are bringing those answers to the forefront and just take out all the guesswork on revenue. So let them show you how by going to doctor podcast network.com slash med evolve. Alright, now let's listen to that really important disclaimer. And we'll catch you guys next week. Cheers.
Jimmy's daughter 41:26
Dr. Demeter is a practicing anesthesiologist. Mr. Aiman is a fee only financial planner you should know that this show is not personalized financial advice for you. In fact, this shows only for your general education and entertainment purposes. So keep listening to learn how to become a three yourself and Joker or go find a great fee only financial planner like Mr. Edmund to create a personalized financial plan.
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