Financial Planning for Doctors

Anyone that has spent enough time reading or writing about money has realized that the most important aspect of money is the psychology of money.  Some people call this behavioral finance, and I even have an ongoing series called The Behavioral Finance Series, because it is such an important topic. The truth is that the why and how of finance matter infinitely more than the “what to do” of finance.  In today’s Philosophy and Finance podcast, we attack this idea.  Tag along as we discuss social arbitrage and how your friends impact your finances.

The Philosophy and Finance Vlog

For those that missed it, the first episode of the Philosophy and Finance podcast series was featured on the Anesthesia Success Podcast last month.  I wrote a post about the Philosophy and Finance segment here as well. If you haven’t, check it out!

This month’s episode focuses on a topic called social arbitrage and choosing our friends wisely.  The basic premise behind this idea is that the friends we choose in life often have an impact on how we save and spend money.

If your best friends are big spenders, there is a big likelihood that you are a big spender, too!  However, if your friends are the frugal type, it will likely be easier for you to make wise financial decisions, too.

If you are interested in seeing the video of the discussion between Justin Harvey, a fee-only financial planner, and me – you can find that below:

The Philosophy and Finance Podcast

However, some people may not prefer to look at my crooked nose for 45 minutes.  If you would prefer to listen to the podcast, instead, you can find that podcast on the Anesthesia Success Podcast.

Click here to listen to listen to the Philosophy and Finance Podcast: Episode 2

By the way, the Anesthesia Success podcast is on all of the typical podcast mediums as well. So, if you prefer to listen to your podcasts on Stitcher, iTunes, etc… you can find this podcast in all of those typical places.

The full transcript of the episode can be found below for those who want to read it.

Fincon 2019 Update

For anyone attending FinCon19, my family and I will be there.  So, if you see a family of 5 with a crazy “three-nager” (aka a three year old acting like a teenager) that is likely my family!

Please, feel free to say, “Hello!”  I love meeting new people and readers of the blog.  We should be in Washington D.C. from Wednesday to Sunday.

Philosophy and Finance Episode 2 Transcript:

[This transcript was auto-generated]]

Justin: 00:00 – Hello everybody. Welcome to episode 25 of the anesthesia success podcast. I am back here with my friend Dr Jimmy Turner and we are doing part two in our ongoing series of our philosophy and finance. So Jimmy the position philosopher and I enjoy chopping it up, talking about how elements of philosophy in human nature and a lot of the softer sciences engage with the more concrete ideas of dollars and cents. So Dr. Turner, grateful to have you with us this morning. Yeah, thanks for having me on. Justin am looking forward to it as always. Yeah. And so Jimmy has a blog over at the physician philosopher, so go ahead and check them out over there. The physician philosopher.com. I, I’ve been perusing some of his recent articles and there’s this idea that he wrote about recently that I want to unpack today. A couple of articles specifically.

Justin: 00:47 – One is about what he calls social arbitrage and the others would be about ideas of mirroring and brain coupling. So clearly we’re getting way into the cognitive sciences here. And I think this is personally really valuable because the more we understand psychology and human nature, there’s I can tell somebody how successful they’re going to be in finance just by getting to know a little bit about their personality and their cognitive makeup and their predispositions from like a decision making standpoint. And that trickles all the way down to how much money you’re gonna make, how much money are you going to save, et cetera. So I think that being able to understand these things can be immensely valuable for, especially physicians. Would you say Jimmy?

Dr. Turner: 01:28 – Absolutely. Yeah. I think it’s, I mean, when you break down all the topics that there are in personal finance, I think the psychology of money is actually probably the most important because you can know what to do. But if you can’t stick to it and you don’t know what gets you off track, then it’s very, it’s impossible. I mean it’s not going to work if you don’t, if you don’t understand the why and the how as much as you understand and that what to do.

Justin: 01:52 – That’s right. And, and this is the stakes get higher and higher. The more money that you make and the more money that you spend and the more that you’re transacting on if you’re making a decision from a lifestyle standpoint. So I’d say for physician friends out there, you stand to have the most to gain from understanding your own behavioral predispositions and how you can either counteract the bad ones or reinforce the good ones in order to build a financially successful future that you’re going to be happy about.

Dr. Turner: 02:22 – I’ll just add on there. I think that you have to understand where your failures, failures can potentially be. And it’s funny because I read about the stuff and write about it all the time and I love talking about it, but at the same time, like I’m just as prone to these mistakes as, as anyone else. I mean, behavioral finance is complicated and human beings are complicated. So even though we’re going to talk about all this, I’m not going to pretend that I’m the best at it. You know, I struggle with this just as much as the next person.

Justin: 02:47 – That’s right. We’re going to just have to help each other along the way here. It’s funny, I was a, I did one of my episodes I did with Dr. Daniel Crosby, who a clinical psychologist. He was saying that actually smart people, I’ll put that in air quotes. Smart people are the most challenged in a lot of these areas because they’re so good at rationalizing their decisions and reinforcing their pre existing biases that you’re, you’re perhaps more at risk for making a bad decision that could be very costly than the average Joe.

Dr. Turner: 03:18 – Yeah. Yeah. Actually, I know we’re not gonna talk about today, but I wrote a post on why, why doctors spend too much money and that’s one of the biggest ones. And like I said, I struggle with this stuff too. So I have a minivan, a swagger wagon as like we like to call it, see a toy, Toyota Sienna and very, very awesome vehicle fits three car seats. It’s, you know, comfortable to drive long distances. We love that thing. But we didn’t splurge on the extra $2,000 for the all wheel drive. And so we have a two wheel drive, front wheel drive minivan. And then I have a you know, V8 rear wheel drive, sporty sedan. And neither of these cars work well in the snow. And so in Winston, where I am, it reliably snows heavy enough that you need a car that can drive in it maybe once or twice a year, but that once or twice a year knocks things out for a few days on each side.

Dr. Turner: 04:06 – And the reason why is because we just don’t have the infrastructure that you guys probably have up north and like, like plowing roads and salting roads. Like, I mean, it’s just, it’s just unbelievable how bad it could be in the south just if you get enough snow. And so I constantly go back and forth with like, do I need to buy a used truck? Should we replaced the swagger wagon for like an SUV with a all wheel drive or four wheel drive capabilities. And then I realize like I’m making this financial decision, it’s going to cost, you know, potentially five to $15,000 for four days of the year. Like that just doesn’t make sense. I could hit your ride. That’s what I did last year. One of our nurse Neste, it’s brought me to work one day cause it’s no, and I was like, Brian, I can, I can’t get there. And so but yeah, I, I, I struggle with that decision all the time and it’s, it’s, I’ve been thinking about it for a year now.

Justin: 04:49 – There you go. Or just call an Uber x and all the jeep wranglers that are out there making two or three times the going rate. We’ll be more than happy to shuttle you to work.

Dr. Turner: 04:56 – Exactly. But you can rationalize anything. And that’s exactly right. So I think that it is more challenging because, and my wife knows that I’m terrible about this. I can talk, talk her into anything because I just, I’m an art. I’m an argue or you know, I did philosophy, I love arguing, I love debating. And so it’s a gift and a curse at the same time.

Justin: 05:16 – That’s great. Well we’re going to have to make sure we come up with an episode in the future where you and I can really go toe to toe because I feel the same way about myself. The find something we strongly disagree on. But for today we’re talking about this idea of social arbitrage. So the idea of arbitrage, this is sort of a financial term. It means when you buy something at one price and at the same time you can sell it somewhere else for higher price and you basically capture the difference in price in that transaction. So if we take like a sort of a, a little bit of a, an older example that this was a popular thing whenever they were installing fiber optic cables between the Chicago Mercantile Exchange in Chicago. And The New York Stock Exchange where there was this sort of a space race to be able to have information flowing more quickly.

Justin: 06:01 – So some companies who had access to data moving more quickly. And this is outlined in Michael Lewis’s book, Flash Boys, which is a really interesting read. But this idea of arbitrage where if you have this information and you know that right now I can buy an ounce of gold in Chicago at $1,200 an ounce and at the same time I can sell it in New York at 1200 and dollars and 5 cents or something like that. And I can buy and sell and just place these transactions at lightning speed and capture that difference in price. That’s what arbitrage is. And so when we’re talking about social arbitrage or geographic arbitrage, which is another one of my favorite topics we’re talking about sort of existing in two different places and having information from two different places and being able to sort of take the best of both worlds.

Justin: 06:48 – Specifically geographic arbitrage, which we’re not going to talk about too much today. But what this would mean in the, in the context of physicians and income and building wealth is you might have an opportunity to work locums, and we’ve talked about this in the past where you can go to somewhere where there’s no doctors and work there for six months or a year and earn a premium because your skill is in demand. And then potentially that’s a lower cost of living area. Or you can take that money that you’ve earned that’s above market rate sort of, and then go back to, you know, wherever you’re from or wherever you want to be longer term. And that’s a geographic arbitrage opportunity. So you’re taking the best of both worlds from two different places. Yeah. the idea that you unpacked Jimmy is one of social arbitrage. So this, some people out there might be thinking social arbitrage. How are we, like, how does, how does this idea of arbitrage apply to relationships and our culture and the way the circles in which we run from a relationship standpoint. So why don’t you take a minute and just unpack for a little, unpack what social arbitrage is.

Dr. Turner: 07:45 – Yeah. So I think that comparing it to, to market ideas. So, so what happens to a lot of people is that they are friends with people and whether they realize it or not, you end up having a very high propensity to become the people that you hang out with. We see that happen in marriage. A, you see that happen in your kids, like when your kid does the most annoying thing you’ve ever seen in your life and then you realize it’s because you do it. I have that happen all of the time. And and so we, we become who we hang around with and the idea of social arbitrage. You know, I guess I can link this back to actually different article that the tale of two doctors, you know, where you compare the Dr. Jones is and the doctor, you know, efs or early financial independence.

Dr. Turner: 08:23 – And basically who you associate with and who you hang out with the most is going to have a profound impact on how you spend money, how you view money, how much money you save, whether it’s okay to Max out your four, three or 400 K or not. And the idea of arbitrage in here is to hang out with people who are still great friends but also have similar financial goals in mind and can help foster good financial decisions. Because we’ve all experienced what happens when we have the opposite, have family or friends that don’t understand our financial decisions or the consequences of the money decisions that we make. And, and essentially what happens is there’s a lot of disagreement and arguing and bickering because people aren’t on the same page. And so if you can find friends that you love, that you, you enjoy hanging out with, and they have a similar financial mindset that’s only going to further entrench you into good financial decisions. And so you’re, you’re arbitraging in a sense that you can find the same happiness and satisfaction oftentimes with different groups of friends and hopefully find the ones that, that can also come along in the financial journey too.

Justin: 09:30 – Yeah, that makes a lot of sense. And you know, this is something that applies to a lot of different areas, not just finances, but I would, I like the idea of the intentionality required. So if I’m gonna move somewhere far away and do the geographic arbitrage to make more money there, that’s obviously, that’s not just gonna fall into my lap. I got to do that on purpose. I got to get on a plane and go somewhere and I’m staying in hotels for a week at a time to do the locums thing. I think this is, it has the same, a similar feel in that way. Like the right group of friends in air quotes is not going to just drop into your lap or a group that partners that are going to help create the ideal version of yourself that you want to be the person you want to become. They’re not just going to necessarily be drawn to you like a magnet in most cases. And so it’s it’s an intentional, what do I want to be like, who do I want to be like and how do I find them? How do you think about that, that process?

Dr. Turner: 10:23 – Well, you know, I think that some of it’s luck. Some of it is being around enough people and realizing that, oh, you know, like when when I talked to this person and look at their life and their lifestyle, it closely mirrors what mine looks like or what I want mine to look like. And so sometimes this can be a, a mentor, mentee kind of relationship where you have someone that’s further along in their career that has, you know, made strong financial decisions and you want to be like that. So you reach out to those people for advice or it might be fellow journeymen on the road. So we’re very close friends with a couple that one of them is a doctor, one of them’s a teacher, just like my wife and I and, and actually the husband and that relationship is, is the guy that got me interested in personal finance and a lot of ways, you know, back during the end of my residency and during my fellowship.

Dr. Turner: 11:12 – And so the conversations are really easy with that couple and not just because we get along really well, but because they have similar mindsets, like they’re not going to buy a house until their debts paid off, their student loans are paid off, which is, you know, what we did. And so when we lived in our tiny 1100 square foot house for two years as an attending that wasn’t weird to them. In fact, it was, it was normal as what was expected because we were doing the right financial thing and whereas other people we’d have over. And so I would say it out loud, you know, like, Oh, you know, nice half. I’m like, yeah, I live at the same house that I did as a medical student. So, you know, like I, I totally would get the the judged kind of feeling from, from some people visiting my houses attending, you know, my first year and a half.

Dr. Turner: 11:54 – Yeah. And Jimmy, I feel like you’d probably wear that as a badge of honor. Yeah. I mean it was fine. I just, you know, it’s, it’s my life and like you said, being intentional is important. So I’m very comfortable in knowing who I am. But a lot of that comes from having my ideas reinforced by other people that are likeminded because you know, when they, when they came along with us and, and had a similar kind of plan, although it’s a different timeline cause everyone’s financial situation is different. It just made it so much easier to stick to the plan because we had people in our corner that were like, no, no, no, you are doing the right thing. Like, you don’t need to go buy the house right now. That’s, that’s the smart financial decision and you need that. You need the reinforcement. You need the encouragement to do the right thing when, when everyone else is doing something different.

Justin: 12:37 – Yeah. I was having a conversation just this weekend with a young co dual physician couple. She was an attending and he was just wrapping up a or he just started an unaccredited fellowship and is doing some moonlighting and these guys are very driven to build wealth early on and make good decisions and are trying to be conscientious about it. And they were making, the remark to me is part of the reason we were even having the conversation was that they saw the people around them just sort of going off a cliff with, with the financial decisions that they were making and people in their departments who were left and right. Committing to pretty high expense lifestyles very early on. While I still have student loans and and lots of other, you know, trying to have kids and all these other things and, and they saw and had the wisdom to recognize, I think this is to their credit that we don’t want that and we’re in danger of doing the same thing as everyone around us because it’s literally everywhere we look. And, and there they were looking to me to say like Justin tr like help us. We don’t even know what to do but we know we don’t want what everyone else is doing and we want to sort of separate ourselves from the pack a little bit.

Dr. Turner: 13:40 – It’s so hard though when you’re surrounded by people that have certain lifestyles and some of the expectations are self place. Like we do it to ourselves. Some of it’s placed on us by our peers. Some of it’s by society. Like a doctor’s lifestyle is supposed to look a certain way and it’s really challenging. But I’ll say that I’m really glad we waited until my student loans were gone. Our student loans were gone to buy a house and recently like, so our, our air conditioner, we have a heat pump, which I don’t even know what a heat pump was before I bought this house. You know, it’s like five months into buying the house and the heat pumps having problems and we found out we had a leak, so put some free on in it and get it back kick in and hopefully it’s going to last months and months and months.

Dr. Turner: 14:17 – Well, it turns out it lasts about three or four months and we probably need to replace the thing. And I’m just thinking like if I’d had my student loan payment that I was paying every month back then and then had a, the expenses of selling and buying a house, which are not insignificant, that costs us quite a bit of money. And then we had our air conditioner go out and cost us six grand. It gives me a little bit of financial stress. Even now, like my emergency funds there, I just don’t like touching it and so it’s going to be fine. Although I liked it, never touched my emergency fund if I can, but like just even that, a little bit of financial stress from having from just a $6,000 bill. Like if I’d had that on top of everything else because I did what everyone else was doing, I can’t even imagine how much stress that would have added to an already very busy, stressful life when this happened. I was like, I’m so glad that we waited. That was such a good decision.

Justin: 15:05 – Especially cause in the Carolinas central air as a non discretionary expense. Oh yeah, no. Yeah, we’re good. We’re getting air conditioning. I mean my, my, my kids’ rooms get up to like 80 something when when this heat pump goes out. So it’s like, I mean, I’m not sleeping and I’m not gonna make my kids do it. Yeah, yeah. Totally. Maybe talk a little bit about how for you has the awareness of this sort of social arbitrage idea changed over time? Cause that’s a med student. It’s, it’s something that is frankly less relevant because everyone’s kind of in the same boat a little bit more. So. And then I, my experience has been as people get into residency, you start to see the, the pack separate a little bit. And then once you, once you hit that, you know, first or second attending job, it’s then it’s kind of, you get the wide dispersion of lifestyles. How has, how has this idea matured for you over time? Yeah. I mean, medical school, everyone’s just trying to survive, you know, and have,

Dr. Turner: 15:52 – Try to limit debt if you have any financial awareness. Although I didn’t do that. And then in residency, you know, here in Winston, it’s actually kind of interesting because once the Salem is such a low cost of living area, people are able to live pretty comfortably as residents as long as they’re reasonable. Now I’m not going to say I’ve never seen a resident driving a Tesla cause I have,

Justin: 16:10 – But you know, that said, most people,

Dr. Turner: 16:14 – You know, they, they can live pretty comfortably on a resident salary here in Winston. Unlike, you know, New York City, big cities that you know, have a much higher cost of living and requires subsidies and stuff. So it didn’t have a big dispersion. And then now when I became an attending, that was very, very different. So I have friends that live a very lavish lifestyle and they work hard to do that. And I have other friends that live very simply and they, you know, they live in a couple of hundred thousand dollar house and are hammering away at debt and doing the right thing and, and mcing out all the retirement space and, and saving, you know, six figures a year towards retirement. And so becoming an attending was really where I noticed that that gap just got so much wider and people started to really differentiate in terms of their financial decisions.

Justin: 17:07 – Yeah, that makes a lot of sense. And I like to think about this in terms of other important important characteristics or personality traits that I value as well. So it’s important to surround yourself financially with people who are going to be, I think, like-minded and help reinforce your positive habits and lifestyles. But there’s a lot of other ways in which you want to surround yourself with the right kind of people. And I think the most fundamental one is people who are happy, people who are kind of like joyful and have a nice outlook on life and they are glass half full kind of people. And there’s some overlap here, right? People who aren’t stressed financially, that helps. That’s a huge help. But it also means that you’re going to look outside of your net worth strata in order to get to not only like economically what you value, but more fundamentally like who are the people that I want to be with?

Justin: 18:02 – And I think what I have found over time, and I actually got to really, I had a really interesting insight from some friends of ours one time who are, they’re very high-earning executives and they we were just talking very honestly about money cause you know, as a person in the finance industry and my wife’s a physician, we’re gonna make a lot of money over our lives and I don’t want to be one. I know exactly what I don’t want to turn into. And it’s just like a detached person who’s obsessed with money and doesn’t ever hang out with anybody outside. My net worth bracket. And so we were talking to them about that cause they had established like a really great balance and we said like what’s the, what’s the secret to seeming to being normal and still being rich? What’d they say? They said they were, that they said they were very blunt.

Justin: 18:45 – They said just we cultivate intentionally friendships with people of all different economic strata. Yeah. They’re very intentional about looking and seeing the person and interacting with people. Like they’re just people and recognizing the commonality that we all have as humans and seeing that first and being willing to engage relationally in ways that I think shows a lot of perspective and maturity and wisdom and that helps keep when you have friends who it’s hard for them to like pay their electric bill in the wintertime or when, when you know that like they have four kids and like one income and the one of them is staying home to raise the kids and it’s like they’re stressed about money because of their, just their, the way their household finances are functioning. That will keep your feet on the ground. That will keep you, I’m very tethered to reality. When you, when you actually have personal relationships with people like that. Now this sounds a little bit silly, I guess like the, or kind of embarrassing to say that you need to be intentional about those things. But I, I think that if you’re not intentional about it, it just could easily not happen.

Dr. Turner: 19:50 – It doesn’t, it doesn’t happen naturally. And, and you know, I guess that’s actually a really important comment to make. So while it’s important to social arbitrage and to surround yourself with likeminded people financially, it’s equally important to have, you know, diversity in your life and have people that don’t look and think and act like you do. And that don’t come from the same social circles at work. That’s something that’s really important. My wife and I, and actually one of the reasons we bought the house that we did is that it has a separate area that someone else could live in if, if, you know, there was ever a need for, you know, someone that we interact with, if, if they ran upon tough times. And and I think that you do have to be intentional about that. That’s not something that happens by accident, particularly in physician circles.

Dr. Turner: 20:33 – I mean, it is much, much easier to go to social events and to friends houses who do the job that you do and just to expect to I mean that’s, that’s honestly as easy thing to do. It’s the easy road to take. And it is hard when a, you’re, you’re with other people that are struggling. And I think that a lot of people that are high income earners kind of, they can stray away from that because they don’t want people to ask like they’re, they’re afraid, they’re afraid of the ask. And I think that it should be opposite. I mean, you are blessed with a high income now. You worked hard for that. You deserve it, you earned it, all that good stuff. But if you have that opportunity, then I 100% expect you to give and, and to give fruitfully and faithfully you know, and I [inaudible] in order to do that, well, you have to surround yourself by people that have a similar mindset with money.

Dr. Turner: 21:20 – Money is a tool and it should reflect the values that we possess and or that we claim to have. And when it doesn’t, you know, if you say that giving the charity is important and 1% of your gross income goes to charity, I would say that a, you maybe need to reflect some more on what’s important to you. Yeah. Money talks absolutely is, it follows your values and, and so I think that it’s the same way with who we hang out with. You know, why do you hang out with, who do you hang out, who you hang out with? Do you always pick the easy way out? Do you ever hang out with people that are different than you that challenge you and your perspectives and can make you a better person? Because Lord knows I don’t have it. All right. And when I’m around other people, I learned something new every time because it’s important to have people that don’t think like you.

Justin: 22:05 – Very important. And I find that, you know, in trying to cultivate and pursue those relationships with people that are just different and in many cases like not as well off it. I’m the recipient, I’m the beneficiary. I’m the one who’s getting the better end of the deal because just relationally I find that I, I’m the one who kinda needs to be knocked back on course as far as seeing and appreciating others for who they are. It sounds a little bit, I guess silly to say out loud, but, but it’s 100% true. Yeah. No, I think it’s important to marry those two ideas. You do need to be around enough people that think like you do financially to encourage you to do the right things. But those, those right things sometimes might be giving money away to other people that diversity is important. Totally.

Justin: 22:50 – So you talked a little bit in these articles that I was referencing, Jimmy, about the idea of brain coupling and mirroring. And the ways that these things play into. So these are sort of the sociological or maybe psychological terms for a little bit of what we’re describing. So can you just take a minute and kind of explain what those words mean and how they fit into this discussion yet? They’re kind of similar, but the idea is in the easiest way to explain this to people experientially is we’ve all had times where we met somebody and the very first time that we met them, we just, you know, you just clicked like that. It just made sense that you were on the same wavelength. I mean we have so many cliches to describe this feeling and the reason why is cause cause it, it happens.

Dr. Turner: 23:32 – So, you know, people are on the same wavelength. We clicked, we hit it off. You know, love at first sight. And like all of those things have to do with the fact that you are on the same frequency with someone else. And so the idea is that the, you hang out with somebody. Actually the more that this occurs. And, and there, there are actually some funny examples of this, but if you in some include, you know, pictures of presidents and the way that they’re sitting in a room and you look around the room, there are three other people in the room sitting exactly the same way with their legs crossed, their arms folded in the same way in their lap. It’s a very, almost subconscious thing that happens, but the more that you hang out with somebody and the more that you respect somebody, the more likely you are to replicate or imitate what they’re doing, whether you realize it or not. And and that goes back to a great example of being kids and, and that sort of stuff. But it’s, you know, the, the idea of brain coupling and then brain coupling, in my opinion, kind of turns into mirroring. So you basically mirror people that you hang out with and that you, you click with and that you’re on the same wavelength. And, and so that’s the basic idea.

Justin: 24:33 – Yeah, makes sense. And so what you’re saying then is that we can take this psychological principle, this mechanism, and harness it for our benefit by saying, I know I’m going to basically turn out more like the people that I hang out with and I want to make sure that I’m putting myself in the way of people that I want to turn out. Like in order to have them rub off on me basically is what you’re saying.

Dr. Turner: 24:57 – Yeah, absolutely. And I think that this isn’t just a, it doesn’t have to be an in person phenomenon. I think it’s one of the reasons why it’s important to, to listen to podcasts and, or to read blogs that have similar mindsets as you do. Because as you and I know financial literacy in the physician sphere is, is unfortunately not very common. Yeah. And because of that, you have to find that thing you want to mirror or the people you want to click with. And it might be in forums, it might be in comments, you know, on, on a blog or wherever. But, but yeah, it’s, it’s, that’s essentially the idea.

Justin: 25:30 – Makes Sense. So there’s different layers to harnessing this principle. One is, okay, I want to try to be friends with you know, the right kind of people or put myself in those, those groups. There’s another layer as far as intentionality that I want to take it a little bit at a time and talk about. And it has to do with basically paying someone, paying someone to be your friend in air quotes. This is in the context of, I know something, there’s something I want to be or do better at. And this could be finances, but it could be a lot of things like a life coach or coach or business coach or a mentor or someone’s gonna help you clinically or whatever it is. And your carving out time on the calendar to say like, you, Dr So-and-so or you coach or financial planner or mentor.

Justin: 26:12 – I want to put myself in a space with you regularly when we don’t have a a reason to do it other than the fact that we’re both kind of committing to it. And maybe I’m paying you to do it because I want that to Kinda rub off on whatever the thing is I want to improve on with that to rub off on me. Do you have any relationships or ways in which that type of approach to this concept has applied for you? Like it wasn’t gonna happen naturally. I wasn’t going to just bump into, I can think of a couple. You know, I have a guy a friend who is a very successful businessman here locally and he is a guy who I recognize, he’s incredibly gifted. We went to the same university and he dropped out in like 2007, 2008 back in the days when they had what they call the Ninja loans, no income, no job application.

Justin: 27:00 – And you could buy houses with 110% or with a hundred and hundred plus percent they would give you and you would put no money down. You didn’t even have to prove that you had a job. So he took advantage of this back then and I was like, man, I missed the golden years. I could have, I could be retired on a real estate empire right now. But but he really took advantage of this very responsibly but took advantage of the environment and you use this opportunity to parlay it into some real estate deals that did really well with, and then he started a business with the money that he made. And it’s just very driven, very goal oriented and also just an amazing human. He volunteers a ton of time. He gives away a ton of money and he’s very successful by almost every meaningful metric. And he’s a guy that I know.

Justin: 27:41 – I want to be more like him and I, we put it on, you know, every three months we pick a date and we get dinner and and he very graciously pays even though I always try to pay, cause I’m like, I’m definitely getting the better of this, but he just tells me about what’s going on in his life and I did the same. And he offers constructive input and insight as to like, here’s some ways to think about growing your business. Here’s some marketing strategies to think about doing. Here’s some ways that I’m giving back or some ways that I’m providing, you know, he’s hired dozens of people into a business that he started himself without a college degree, which is insane, but not only that, he’s incredibly conscientious about the ways that he wants to invest in the lives of his employees, make their lives better, pay them a really great wage, and continue to give them a great environment to work in. And I think these are all such amazing qualities that are just sort of flowing out of his character and who he is. The more I can intentionally, no, I don’t, I don’t pay him necessarily, but it’s a very, we would have no other reason to run into each other. We don’t live in the same part of town. We don’t work in the same industry, but I’m like really set on, keeping in touch with and continuing to be mentored by this guy because it’s just so formative for me and really helpful.

Dr. Turner: 28:53 – Yeah. So, I mean, I, I think that that, yeah, I completely get the idea and, and I think that that’s important to be intentional with your time and to, to find people that in some ways it sounds like a mentor relationship. And so I’ve definitely had that experience in several different ways in academics, obviously that, that includes research and clinical stuff and who I want to become and, and seeking the advice of people that are the physician that I want to be someday and that I’m trying to become now. And so I certainly do that clinically at work. I as you know, join the white coat investor network and let’s talk a little bit about that for a second. What does that exactly? Yeah, so the white coat investor network is obviously started by the white coat investors. So Jim Dolly, he’s practicing mercy medicine physician and then the other two that were in at a time or leaf, Colleen and Peter Kim and leave does anesthesia.

Dr. Turner: 29:44 – Peter does anesthesia and then they added me. I also do anesthesia. So where we’re lacking in a, it’s a diversity there, but these are three guys that were really spreading messages that I appreciated and respected and they’re trying to help solve the financial literacy gap that exists. And that’s really important to me. And they were having effective reach and doing that. And so I entered into a business agreement with them to, to be able to have the opportunity to interact with them more often to benefit from their experience. And in some, in some ways it’s kind of like a mastermind group. Although that’s not exactly what it is, you know, I can more readily access those three people, the three doctors that had started those blogs and ask them questions and seek advice. And that has proved tremendously helpful in the growth of, of my blog and the message of defeating burnout, financial independence that may or may not have gotten out there as quickly. So, and that all resulted from putting time and money and energy into that relationship and, and honestly seeking it out. So yeah, that, that’s, that’s definitely panned out in my life through the, through the blogging experience that I’ve had.

Justin: 30:58 – Yeah. And maybe we could talk a little bit about the, what the fire community is cause we referenced that every now and then the financial independence retire early. And that’s actually how you and I met last year at the fin con conference. That’s the financial content producers and it’s bloggers and people who are doing video and have youtube channels and all that who are trying to essentially like spread financial literacy through all kinds of different media. And this is something, or I think you and I have both benefited from not only learning like technical skills, like how do I record a video and put it on youtube or how do I think about, you know, blogging strategies, but also putting ourselves in a room with a bunch of people who are way further ahead and further along and have really matured in their ideas of what does it like to live my life in a way that I can essentially quit working or no longer have the need to work way earlier than is normal.

Justin: 31:53 – And it’s, it’s a countercultural thing. But, but I have found, and I’m interested to hear your take on this, is once you get in a room with a bunch of people who are like that, you’re kinda like, why would I not do this? We live in this time and this place in 2019 in the United States where there’s economic abundance all around us and we can either be in a rat race where we spend as fast as we can and be stressed about it. Or we can recognize this is such an outlier. On the stage of human history, all we have to do is, you know, make a couple counter-cultural decisions in order to have what’s a, a, a very attractive opportunity to be financially independent way earlier than has ever been possible outside of like, you know, monarchs and stuff way back in the day. Yeah. Yeah. It’s, it’s an interesting and

Dr. Turner: 32:40 – Yeah, I think that is the biggest benefit of Finn Con. I mean, I love the breakout sessions and the, you know, the talks and the panels and all of that, but ultimately it’s about networking with people that can kind of help you in your journey and, and help shape your message. And, and that go into that conference is actually really very helpful for, for my blog and, and figuring out that message because I realized in going that I was writing and I had lots of ideas out there, but I wasn’t riding with a very specific message for a very specific audience. And so the financial independence retire early community is, it’s really interesting that they’re, they’re kind of different brands of fire. I mean you have people that are just complete minimalists and they want to save every single cent and dollar that they can to basically frugal their way to financial independence as early as possible.

Dr. Turner: 33:32 – And you have from that end of the spectrum to the fat fire end of the spectrum where people plan to not only fire, so retire early with financial dependence, but they plan on doing it in style with, you know, six figures in annual income. By the age of, you know, 40 or 45 I mean, some of these people are retiring in their thirties. It’s, it’s kind of insane, but it really is pretty simple math when you get down to it. And if you simply spend less than you make and you save the difference, whatever that number is that you’re saving after you determine how much you need, you can kind of get an idea for how long it’s going to take. And so my wife and I are planning on being financially dependent in our mid forties I don’t focus a ton on fire on my site.

Dr. Turner: 34:12 – And actually I think that a lot of times fire can be unhelpful. And the reason why it’s because I’m young in my career, I’m two years out from fellowship. And so that’s not something that is always healthy to focus on. I’m still 10 years away. And the one thing that I would caution people to be careful about in this discussion is that it’s really good to have a plan. Obviously it’s really good to be intentional with your money, but it’s also really good to find some contentment today. And what fire can do is say, well, this is the goal fires the goal. I want to retire as early as possible and walk away from my job or do whatever I want for my life. And while that’s that goal in and of itself is fine, when that becomes the only goal and every single dollar you spend becomes painful because you’re trying to get to that goal and you realize it’s still years away.

Dr. Turner: 34:59 – It can produce a lot of Discontentment now. And, and what happens is people focus on the end of the journey instead of enjoying the journey that they’re on. And I’ve had problems with that personally. And so, so I focus much more on the financial independence piece and the freedom that that provides. But I still plan on working as a doctor when I become financially independent. So long as I still love the job now I’m not gonna be working full time, but I’ll work as much as I want to and it helps take care of people and use the skill set that I was given to do that probably involve a lot of mission work. It looks different for everybody. So I prefer partial fire where you use it to make the job that you love. You’re not trying to escape your job, you’re trying to get rid of the, you don’t like, you’re trying to maybe have a three day weekend every weekend to have some better work life balance. Or maybe it’s a day in the middle of the week. It looks different for everybody. But what you’re trying to go for is the time you want time to do what is important to you. Money’s just a tool to get you that time. And so when money becomes the goal, and it’s not the goal of designing your life how you want it to be, that’s when it gets gets touchy. But yeah, there are so many different branches of fire that it’s, it’s a hole that you fall into and you just keep falling.

Justin: 36:08 – Yeah, that’s totally true. And I think for our audience who by and large I would guess is not really initiated to the fire world. I think if we’re talking about what does it mean to think about being counter-cultural in the way that you handle your money and putting yourself in groups of people who are slow. You don’t have to be super counter-cultural. If you’re making a, an anesthesiologist or pain physicians income, you’ve only gotta be a little bit, you know, move your compass needle just a little bit to be able to save significant amounts, move towards financial independence much more quickly than your peers. And specifically, the number I always encourage people to actively manage to, to keep an eye on is the savings rate. And you alluded to this earlier, which is all the money that you make. What percentage of it do you keep and invest for the longterm. That is the number you gotta manage. And it, I would go as far as to argue like investments become not totally irrelevant but much less important and your investment returns over time. Like yeah, you got to get your asset allocation dialed in. But, but you can afford to make, you can make a lot of mistakes and a lot of other areas and if your savings rate is high enough, none of them will matter and you will still get to financial independence and much more quickly than any of your peers.

Dr. Turner: 37:19 – 100% and I mean, and we know based on just math and compound interest and how it works, that your savings rate is going to determine the vast majority of your wealth for 10 or 15 years. I mean, it’s not, it’s not really until you’re 17 if you’re saving diligently that your compound interest begins to matter more than the money you’ve put in. So your savings rate matters much more than your investment choices. So long as you’re not investing in like bitcoin or some other version of cryptocurrency that’s gonna tank or you’re trying to time the market. I mean, as long as you’re holding to basic investing principles, your savings rate by far and away as the first, second, third most important thing in that conversation. And fortunately if you have a high income, it doesn’t have to be that complicated. As long as you’re meeting your savings goal, you could spend whatever’s left.

Dr. Turner: 38:03 – And so I know that a lot of people out there, but they do zero, $0 million budgets or you know, budgeting with envelope systems or, you know, it gets really complicated or they track it every week or two. And honestly, my wife and I don’t budget, you know, we occasionally track spending when we feel like we’re getting off and we need to get back to where we were and figure out where our money’s going. But as long as we’re meeting our savings goals, I don’t particularly care where our money’s going. So as long as we’re not digging into our emergency fund. Yeah. So,

Justin: 38:30 – Yup. Totally. And there’s a, so there’s a calculator on the website, anesthesia, success dot slash. Resources. There’s a great calculator that just to give you listeners an idea of what kind of savings rate do I need in order to retire in x number of years and you can just back into the right answer. If I make x and I save Y, that means I’ve got to work for this many years. Go there and check that out because it might be eye opening for you. If you’re currently saving like 6% of your income or 9% or 25% it’s going to give you a pretty clear idea of well my runway is nine years or 12 years or 47 years and if you’re counting on being a 71 year old anesthesiologists still running call shifts and all that, in order to finance your lifestyle, I’m going to encourage you to rethink, rethink some of the assumptions and try to step back from the edge a little bit and build a lifestyle that’s going to be more sustainable and that’s going to allow you to get free a little more quickly.

Dr. Turner: 39:24 – So Justin, is that calculator based on your current annual salary or is that based on annual spending or, oh,

Justin: 39:31 – So it takes, it uses both variables and then you can add an assumed income, a are sorry and assumed investment return and it’s, it’s a little bit rudimentary but all the key variables are captured. So I want to wrap this up in a minute. Thank you for your time. In closing, as we’re thinking about being intentional with relationships, in order to put ourselves in a group of people that we want to be more like if somebody is out there, is listening and thinking this concept is blowing my mind, I want to be higher earning and better saving and more generous and more happy. And I look around and I realized that none of the people I’m hanging out with right now are like that. What would you recommend as far as taking a first step towards being intentional about the kinds of relationships or cultivating?

Dr. Turner: 40:12 – Well, you know, I think they’re kind of two options. If there’s no one around that really fits that mold. The first is to go and find it. That might be in person, there might be people. And part of the problem with this, Justin, honestly, is that money is such a taboo opic in medicine and really anywhere that there may be people like that that are around you, you just don’t know it. You know, people that are trying to do the stealth wealth model that aren’t as outspoken and talkative as I am. And so, you know, like, which is, and that’s one of the reasons why I talk so much about this. People look at me funny, but it’s like, well, I’m trying to break down that taboo kind of feeling that money has, that I think is important. But if you can’t find it and you can’t break in any of those conversations, then obviously there are online communities that exist, whether that’s Facebook groups, forums, websites, blogs, podcasts and people.

Dr. Turner: 40:59 – They’re actually really friendly. You know, most, most of the people in the financial independence community love teaching people this stuff. I mean, once you get them talking, like it’s not going to stop and, and they’re willing to, to help out a lot. And so that’s, that’s one option. The other option is to control blaze your own path. When you start having these conversations, and you do have to be careful because you want to offend people, but when we started having these conversations and they’re going to come up, when you start spending and saving money differently than other people, they’re going to ask you why you’re not buying a house. They’re going to ask you why you haven’t bought a Peloton or a Tesla or whatever the new thing is. And the conversation is going to be very natural and people are gonna Realize, Oh, you think about money differently.

Dr. Turner: 41:37 – Why do you do that? Like, well, I want to be financially independent. My forties they’re like, what’s financial independence? And as you explain it to them and then they understand that you’re going to be able to retire when you’re in your mid forties or 50 they’re going to want to learn about it. You know, like that. I’ve never had that conversation happens. And someone’s like, ah, I’m just not interested in this conversation. Like they always ask questions. And so that gives you an opportunity to find people that may be interested in guess what maybe you get to become the mentor in some ways. And you know, at Wake I’ve definitely had that experience and it’s been wonderful because the community that’s been built, I’ll be walking down the hall pass by a Coworker, you know, one of our crns or when the anesthesia docs I work with are, you know, even some of the, the techs and, and they’ll tell me like, Jimmy, yes, what?

Dr. Turner: 42:22 – I’m like, what, what’s going on? Like I just paid off my car, know I just paid off my student loans. And they get so excited. We give each other a high five in the hallway. And you know, building that community is actually not as challenging as you think. And the more that you open this kind of open culture and make it acceptable to talk about money and to celebrate people’s wins, the easier it becomes. And so sometimes the answer is not easy. Sometimes the answers that you need to start your own community and you need to build that culture where you work. And as we do that, this is going to become easier and easier to find people like us that want to be like us, that we want to be like to, to help cultivate these full net financial goals. Absolutely. Cool. Well, Dr Jimmy Turner, as always, it’s been a pleasure talking philosophy and finance with you. Thank you very much for joining us on the anesthesia success podcast. Yeah, man, thanks for hanging on. Justin’s great. Great. As always.

TPP

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