Throughout the first thirty years of my existence I did not learn a thing about personal finance from just about anyone. Not my parents. Not my grandparents. Certainly not my medical school. I had to learn it on my own, which I found to be very frustrating. In fact, my journey to make my financial manifesto started when I noticed a book (Boglehead’s Guide to Investing) sitting on my friend’s coffee table.
You see, I was putting money into investing while in medical school despite the fact that I had $150,000 of debt accumulating at 6.8% interest. Not caring about the math (or maybe I just hadn’t thought about it?), I didn’t put 2 and 2 together to figure out I had to do REALLY well in the stock market to make up for the fees, taxes, and time I was putting into that to make up for the debt I was rapidly accumulating.
Up to the point that I found the Boglehead way, I thought you just threw money into stocks and made money investing. You did a little research, paid some fees, and made some money. I enjoyed investing, but really knew nothing about what I was doing.
(For what it’s worth, I ended up taking the money out of my individual stocks, paid the taxes, and now am investing differently as you’ll read)
The problem is that you will not be taught about personal finance, investing, or destroying your debt in medical school, or really anywhere by anyone without looking. The answer is found in a little bit of self-motivation.
Why should you care, though? You are a busy medical professional (or medical professional in training). You don’t have time to learn about this, you need to be focusing on the Kreb’s cycle or the various steps required to perform a laparoscopic appendectomy. Right?
The problem is that time can either be your greatest friend or your worst enemy. Financial burdens and lack of financial success can be harbingers for burnout. Learning about finances and adjusting your course can help with wellness and treat burnout caused in part by financial stressors.
The longer we wait to educate ourselves about this, the less time we have for compounding interest to work in our favor. If you need a powerful example of that, you can read my post on Building Wealth. Trust me when I say compounding interest can work FOR you (investments) or AGAINST you (debt).
So, now that I have been enlightened and plan to continue my personal journey in finance, I want to use part of this blog to follow my journey to financial independence, wealth, and the ability to retire early (though I doubt I’d ever do it completely, I LOVE what I do!)
I am four months into my life as an attending anesthesiologist. Given my late start into finances, I made little effort to do anything towards my wealth as a resident or fellow aside from trying to limit debt and costs.
My starting net worth is not an ideal place to start. It is what it is. But as my wife would say,
“It is what it is, but it will be what you make it.”
I now have the following concrete goals that will be what I make it!
Here is the TPP manifesto!
- I will have my first $100,000 in assets by one year out. July 1st, 2018.
- I will invest WHILE destroying debt.
- I will have a positive net-worth (Assets – Debts) two years out from training. So, July 1st, 2019.
- Starting Net Worth Day 1 as an attending physician (age 32), July 1st 2017 = Negative $208,000. This includes my car loans (oops) and student loans. I do not have any credit card debt (at least I avoided that!)
- I will be free of student loan debt (starting at $200,000) by the same date as above! July 1st, 2019. This, of course, will have a lot to do with achieving goal number 2.
- I will put $4,000 per month (>25% of take home pay) into student loan debt
- An additional $40,000 will be placed into my student loans from windfall money (quarterly and annual bonuses) each year.
- I will live like a resident (not buy a house) until I have paid off my student loans.
- The goal of becoming a millionaire eight years out from training (Age 40).
- I will be financially independent and be ABLE to retire by 15 years from graduating (Age 47). July 1st, 2032.
- The goal here will be $3,750,000. (I am sure this number will change)
- My childrens’ ages will be 16, 19, and 22.
- Speaking of children, each of my kids (total 3) will have at least $150,000 in their 529. This number is likely to increase!
- Most importantly, I will live a life full of wellness along the way! I am not going to wait to live my life until these numbers are reached. I am going to live my life WHILE I make these numbers happen!
- Spending will occur intentionally as a means to an end: Wellness and happiness.
- I will donate money to charity (my church and others I feel appropriate)
- I will help others along the way
Following along for updates given at least every six months regarding my success and/or struggles towards these goals!
What about you? Have you written your goals out? Do you know what your goals are? Do you know how much you’ll need? Or has this all just been an afterthought?