The ten financial independence milestones

By Jimmy Turner, MD
The Physician Philosopher

The Ten Financial Independence Milestones

Though these milestones are listed in numerical order, they don’t have to happen that way. For example, you might accomplish number 5 before you accomplish number 4.

That said, each goal is important and worthy of celebrating!  Let’s get to it.

1) Positive Momentum 

While I prefer the avalanche method to paying down debt, the snowball method does involve nice imagery.  In order to tackle our debts, we need to get the snowball moving down hill.  In other words, the first step is simply positive momentum.

Just like a snowball rolling down hill, the first step worth celebrating in the journey towards financial independence is gaining positive momentum.  In the life of most young medical professional, this usually happens at the end of training.

When you finally finish that long road, and experience your first attending paycheck, this is certainly a cause worth celebrating. Just don’t forget to use The 10% Rule to keep that celebration in check!  This is not your permission to allow massive lifestyle creep.

What did I do?  The dumbest financial thing one can do.  I financed a naturally aspirated, V-8 four-door sedan with a corvette engine and a stick.  Oh, and we bought a country club membership.  Apparently, I am basically a walking stereotype.  But that’s how we spent our 10% increase. Then, we went to work financially and increased our net worth $250,000 in one year.

2) $100,000 in student loans paid off

If you are in the 20% of medical students who graduate with no medical school debt, you get to celebrate this one early.  For the rest of us mere mortals, paying off this mountain of debt is a big deal.

However, even if you are hammering away at your debt it will take some time.  And that can be discouraging.  So, I encourage you to celebrate the moment when you pay off six figures of student loan debt.  That is a big frickin’ deal.

If you need help on that journey, don’t forget to visit the student loan refinance page.  And remember, you can refinance as many times as you want – it is called a student loan refinance ladder.

3) Zero Dollar Net Worth

Going from broke to woke was one of the more exciting moments of our journey so far.  While it wasn’t quite the same as paying off our $200,000 in student loans, it felt great!

What I am talking about is the moment when the person pan-handling on the streets no longer has a larger net worth than you, the doctor.  Getting your net worth back to zero is a huge moment.  Take it from someone who started with a net worth of less than (-)$207,000 when he started.

When you get back to broke, go do something nice for yourself.  Just don’t make it too fancy. Otherwise, you’ll be back to that negative net worth!  Around the time we got to a zero dollar net worth, we celebrated with a Disney cruise a few months later with our two oldest kids and some of our close friends.

4) Student Loans Paid Off!

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This one felt like a giant burden had been lifted off my shoulders.  It also did a lot to mend my burned out soul.  What a big moment in our journey towards financial independence. It also did a lot to continue our positive momentum.  Paying off $200,000 in 19 months proved that we could accomplish our financial goals if we put our minds to it.

And, boy oh boy, did we celebrate this one.  What did we do?  Well, we bought a house.

I’d be lying if I told you that sending a giant check towards our student loans (composed primarily from our prior home sale) at the same time we bought a house wasn’t stressful financially.

The lesson here?  Don’t be me.  Celebrate kicking those loans in the teeth with something a little more reasonable than a new mortgage!

5) Paid for Car with Cash

I look forward to this day, but hope that it won’t be any time soon.  While my wife and I would like a car that would actually navigate snowy terrain, I am in no rush to put more money from our house towards cars.

When we do make that next car purchase, it is going to be with straight cash.  I picture us rolling in like mobsters with a brief case full of $1 bills and emptying it on some manager’s desk.  I’ll come up with something clever to say as I peel out of the dealership.

6) $500,000 Net Worth

The next step on the journey worth celebrating might actually come before this one: when you get to a six figure investment total.  However, if I added that step, this post would not be a well-rounded “10 milestones to financial independence”.

To avoid the odd numbers, I think that at a bare-minimum you should celebrate when you get to half a million in net worth.  This is the point where your money starts to work for you in the market.  In fact, if your entire net worth came from investments, you’d be earning $30,000 to $40,000 annually if you got only 6-8% in the market.

7) $1,000,000 in Assets

If $500,000 is sweet, then surely a cool million is even better right?

This is where things start to get silly.  If you earn that same 6-8% in the market we discussed above, with $1 million now you are earning more in a year than you made during your entire year working as a resident physician ($60,000-$80,000).

Let that sink in.  You are earning more money by doing nothing than you earned working 80-100 hour work weeks for 48 weeks of the year.  This is what time in the market does.  It’s also why you should start saving as soon as you can.

8) Mortgage Paid Off

In many of my financial talks, I ask people to raise their hand if they own a house or a car.  Many put their hands up.  I then ask how many of them have made their last payment. After that, about 75% of the hands fall, to which I usually say, “If any of you are confused about who owns your house or your car, all you need to do is stop making payments and the bank will gladly remind you of who owns your stuff.”

I say this in jest and it usually gets a good laugh from the audience.

All joking aside, this is one of the moments that I am most excited for along our journey.  The point at which we can say that we actually own our home seems like such a big deal!  This is one we will celebrate right.

9) Lean Financial Independence 

Lean Financial Independence (FI) has a variety of definitions.  I’ll throw out another.  The point at which your basic needs (food, water, shelter, utilities, etc) are covered is the point at which you are technically financially independent.

It’s the point where you no longer need a paycheck.  And whether you plan on getting their through investment savings, passive income, or the hybrid model of financial independence I promote – getting to this point is a big part of the journey.

10) Fat Financial Independence 

Fat FI is the number at which you can not only cover your basic needs, but it is the point at which you can also take all of those luxury trips you’ve planned for your retirement.  In other words, this is “more than enough” FI.  While Lean FI might be 25 x your current annual spending, this is likely closer to 30-40 x your annual spending.

At this point, you’ve achieved all that you could hope to achieve on the personal finance journey.  Of course, this assumes that you’ve been giving to charity and others who need it along the way.  If you are waiting until this point to give, you likely never will.

Take Home: Milestones to Financial Independence

Hopefully, you had some fun either looking forward to the milestones you will soon achieve, or looking back on the ones you have already conquered.

Each of these ten milestones to financial independence are worth celebrating.  I’d love to hear about the order in which you achieve them.  And what you did to celebrate the occasion!

What do you think about these milestones?  Did I miss any?  What would you have added or subtracted?  What did you do to celebrate these milestones on your journey?  Which was the biggest deal?  Leave a comment below.



  1. Tim Hodges MD

    I agree with all of these except owning a car. Why would you want to own something that is guaranteed to depreciate? Again, just my opinion, but it seems to make more sense to get an inexpensive lease than owning a car you will be lucky to get out what it’s worth, when you try to trade it in. Maybe owning a used car makes some sense, but many of them will be almost worthless in a few years.

    • Jimmy Turner, MD

      Mainly because a lease implies you will always have a monthly payment (or at least that is what happens to most that I know who have a lease). Getting out of the monthly payment mindset is key, in my opininion.

      Plus, I’m a car guy 🙂

      • Gregory Hill

        I agree. I’m tired of payments. No more lease payments . The next purchase will be cash !

  2. Dale

    Why pay off my 3.25% mortgage when (usually) I can invest and get a much larger return?

    • Jimmy Turner, MD

      I don’t know anyone who has ever regretted paying off debt. I know LOADS of people who have regretted a bad investment or spending choice.

      I am convinced that feeling truly financially free has so much to do with getting away with monthly payments. That includes mortgages, though I’ll admit it seems less important than other monthly expenses.

  3. William ANDERSON

    I always buy used cars. Apparently, people who usually buy Mercedes want to buy a NEW one, so the used ones are a real bargain. They are typically as good or better than new anyway, and most of the depreciation is done in the first 2 or 3 years. I keep cars until I can’t stand them – 8 to 10 years. Also, I buy with cash. No car payment to keep up with, though I’m saving for the next one all along.

  4. Ed

    One of the points I celebrated, was when my credit score no longer mattered… because I never planned on taking out another loan. Or another mortgage for that matter…

    We’re taught how important a credit score is from the very first time we enter a bank and see all of those interest rates on the board at the age of 5 or 6… But throughout history being in debt has always had a negative connotation, it’s only the recent past where it’s become acceptable. Debtors’ prisons, indentured servitude, and some forms of slavery were all related to debt… There’s nothing quite so great a feeling as realizing that you’re FREE from the shackles that debt imposes.

    Everyone should feel so free!


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