The Physician Philosopher Podcast
TPP 31: Part 2 – Mastering Your Money (Physicians Who Feel Stuck/Trapped)
Are you a doctor tired of having to choose between being a good parent, a good spouse, a good physician, or any of the other roles in your life? The three pillars to living life on your terms can help and that is exactly what I wanted to dive into today.
In order to find a work-life balance as a partner, parent, and physician, you have to master your mindset, your money, and your life. In the previous post, 3 Pillars of Freedom for Physicians Who Feel Trapped, I went into detail on two of the three pillars of being able to live life on your terms.
I’m all about empowering doctors to practice medicine because they want to, and not because they have to. I think that’s the only way that we can change medicine, honestly. It’s by empowering physicians to be able to stand up and live life on their terms, and stand up in the hospital when they’re there.
To be able to get to that point where we have the first and third pillar that we talked about last week, which is your mindset and your life, you have to put gas in the car. This is what is going to get us to the destination of having that work-life balance we’re looking for.
The Gas For Physicians To Stopped Being Trapped
There’s a reason that mastering your money is the second pillar. There are three pillars, again, they go in order; your mindset, your money, and your life. The reason for pillar number two, money, is because that’s the gas that we’re going to put in the car to accomplish pillar number three, which is our work-life balance.
Inside the Alpha Coaching Experience, we teach these three distinct pillars. This is done through courses, content, and coaching inside that program. Unfortunately, I didn’t always realize that these three pillars should happen in a specific order until I went through my journey through burnout and my journey through feeling trapped in medicine.
We talk about mastering your mindset first because of the importance of working on your thoughts before you change your situation, which is pillar number three, finding that work-life balance, of making sure that you understand the real problem before you find the solution.
Otherwise, you’ll just spin your wheels, solving a problem that really isn’t the problem. You’ll change jobs, you’ll go part-time, and you’re going to find out you’re still miserable. That’s why you need to master your mindset first.
So this week, we’re going to go back to pillar two. We talked about mindset, we talked about your life. Now we’re going to talk about pillar number two, which is the gas for the car. It’s the means to the end, the power that is providing the machine to find that work-life balance in pillar three. Let’s get into it, mastering your money.
Why Mastering Money For Physicians Matters
I come from a personal finance blogger background. A lot of people are like, “Oh, Jimmy, I’m so confused. You’re getting into coaching.” It’s the same thing. I’m doing the same work. I’m providing freedom to doctors. I’m helping them take the same journey that I took in finding a work-life balance. The only way to do that, whether you like it or not, whether you agree with it or not, is to have mastery of your finances. Most doctors don’t, most doctors are not financially literate.
I started there because I wanted doctors to be able to fight burnout with financial independence. That was a tagline on my site for a very long time, fight burnout with financial independence. I’ve always linked the two ideas of wellness and money. The very first tagline on the Physician Philosopher, in fact, was wealth and wellness. These are all the same things, and for a while, I had a really hard time. It was like an existential crisis where I couldn’t figure out exactly why I was having a hard time explaining what exactly my business does. If you asked me for an elevator pitch a year ago, I wouldn’t have been able to give you one. I’d be like, “Well, I kind of do a little bit of everything. I’m a blogger, I’m a podcaster, I coach doctors, and I teach financial literacy and all this stuff.”
It all fits under the same umbrella, which is helping doctors live life on their terms, to practice medicine because you want to, not because you have to. To change the culture of medicine by empowering physicians to have the power they need to stand up and stop this madness. That is the culture of medicine and this thing that we’ve created.
In order to do any of that, you have to master your money because most doctors or many doctors feel trapped and unable to change their situation. They can’t change medicine. They can’t stop practicing because they’re dependent upon their paycheck. Why is that the case? Because they don’t have the financial freedom to change their situation. Their current lifestyle requires the money that they make, and isn’t that a funny thing? Even though we could afford a simpler life while we were residents, our lifestyles almost always match what we make. That’s why doctors feel trapped in their lifestyles.
It’s like the old saying in sports: when we play to the level of our competition, you step up. You’re playing the number five, 10 teams in the country and I remember this. I remember my team when I was, I think, a sophomore. We were not very good. In fact, I’m taking it back. It’s my freshman year playing division two college soccer. Our team is not good. We are not good at all. I think we won two games that year.
But you know what? We rose to the level of the competition. We played like the number 10 or 15 team in the country that was Queen’s University at the time. They came in, we tied them. We rose to the level of the competition, right? So it was an amazing thing because we’d never done that before, tying Queens. At the same time, we also weren’t playing that level every week. The reason that we played so well that day, and we really dug in on the defensive end was because we had a hard time scoring on them, it was because we rose to the level of our competition.
In the same way, we do the same thing with money. When you earn $60,000 a year, isn’t it amazing that you can learn how to live on $60,000 a year? And that when you make $250,000 a year, you adapt to living on 250 grand?
That’s not a coincidence. Actually, there’s a name for this phenomenon. It’s called Parkinson’s Law, which is the idea that work expands so as to fill the time available for its completion. He’s talking about work and time. Money is the same way. You make more money, you spend more money. You make less money, you learn how to live on less money. That’s how humans operate.
Speaking of soccer, that’s how I operated when I was in the season. I played division two soccer. During the season I knew that any waking moment that I had off the field, I had to be in the books because I didn’t have a ton of time when I wasn’t on the field, or training, or working out, or lifting. So if I wasn’t on the pitch, I wasn’t on the field practicing or playing, my head was in books. I was going to become a physician. I knew that I needed to get good grades, the work had to get done, and there’s only so much time that I had to do it. You know what? I did my work. Yet, when the off-season came around, I was like, “Ah, man, I got plenty of time. I don’t have practice today. There are no matches. I’m going to go play beach volleyball with my friends. I’m going to go play some pickup basketball.” And I procrastinated.
It’s amazing that when I had more time, my grades were actually not as good because I would procrastinate. When I had less time, I had to be disciplined. So when you have 60 grand, you’re more disciplined than you are typically when you have 250 grand and you wonder where the money is going.
In fact, this impacts every area of our life. I’ve heard it said about toothpaste. Every time you have a full toothpaste tube, you just squeeze it out there. You don’t really care how much you’re using. But then, man, when you get down to that last little nook and cranny, you’re going to spend every little ounce of energy that you can to get that last bit of toothpaste out. I’m pretty sure I’m not the only one listening to this podcast that does that, by the way. So we do it with our time, we do with our money, we do with toothpaste. This is called Parkinson’s Law. It’s the same phenomenon in all of those things.
A Physician’s Journey To Mastering Their Money
Money is also the same exact thing. When you have plenty of it, you’re going to spend it. You won’t keep as close of an eye on it. You’ll spend every dollar, and then wonder where it all went, and why you can’t afford to go part-time, and why you can’t afford to have the work-life balance that we want. The reason why is because you haven’t mastered your money mindset. It isn’t that you can’t afford it. It is that you haven’t mastered your money mindset.
Most doctors are dependent on their paycheck from clinical medicine to live their life. So I want to talk about mastering your money mindset today, and I’m going to introduce you to an idea I coach topics on, the Hybrid Financial Independence Model. This is what I teach inside the Alpha Coaching Experience, and I think it’s incredibly powerful because there are two different ways to get to financial independence, and I think, I know actually, that both can be helpful.
Why? Because this is the exact journey that my family has taken. I’m 35, and I don’t have to practice medicine anymore. That is because I mastered my money mindset. So as the name suggests, the Hybrid Financial Independence Model has two parts. It’s the hybrid of two different models that not a lot of people are taught.
The first model is the traditional financial independence model. This involves the art of learning how to earn a good paycheck, which if you’re a doctor, you do, saving money, and then building wealth. So the purpose of this part of the system or part one of the Hybrid FI Model is to learn how to save enough money to secure your financial future, to have enough money set aside that you could withdraw a safe amount each year, and rest reliably assured that you’re going to make it.
Of course, we go into the nitty-gritty details of how to figure this out inside the video courses and content in the Alpha Coaching Experience, but at a very high level, our job is to earn a good paycheck, again, we all do that, to spend less than we earn, unfortunately, most of us don’t do that, and then to save the difference between the two, what you earn and what you spend. That’s your kind of wealth-building gap if you want to think about it that way.
If you can do that, if you can take that wealth-building gap, if you can build wealth with somewhere around 30% of your income and then stuff it, as much as you can of that 30% into diversified low-cost index funds in a reasonable asset allocation, you’ll likely be able to retire by the age of 50 to 60, assuming that you have a traditional path in medicine that you finished training in your mid-30s or early 30 sometimes.
If I stop there, though, I’d be stopping a traditional kind of financial independence teaching, and you’d be able to retire at the age of somewhere between 50 and 60, usually, around 60 if you do the math. That’s a long and steady way of building wealth, and I am a huge, huge fan of this tried-and-true method.
Then I had the realization that when all of my kids grow up and I got to financial independence by 45 to 49, which was about the range that I was projected to make it, my family was projected to make it, my youngest kid would be out of the house. I’d finally be able to live life how I want to after my kids are gone.
That was unacceptable. It quickly became my why, my personal why for the second part of the Hybrid FI Model is so that I could be financially free now so that I could live life and have a work-life balance now while my kids are young, so I could be the dad that I wanted to be present for them.
And you know what? As crazy as it sounds, I might go back and work full-time later. I might go part-time now, which I have, I am, and then go back full-time later when my kids are gone. I love practicing medicine, but I just want to be a good dad right now. I don’t want to have to choose between being a good dad, a good doctor, and a good husband. Because while I wanted financial independence and financial freedom in the future, which is what part one of this model will allow you to do, I also wanted financial freedom now. That’s where the second part of the Hybrid Financial Independence Model.
How Physicians Can Master Their Money And Have Balance
So if we just stopped right there, that would get you to your goal. If you want to work more shifts, make more money, and get there faster at 45 or 43, by all means, my friend, do that, but that comes at a cost. You’re going to burn the candle very quickly by picking up extra shifts and making more money. But most doctors, that’s the best way to earn more money, or the easiest, the one that has the least friction. You just pick up an extra shift, do more surgery, stay later at work.
I didn’t want to do those things because all of that meant I had to sacrifice being home and available for my kids. So the second part of this model is what allows you to have that freedom now, generating more cash flow to support your current life. This is the other model that’s taught.
My buddy, Peter Kim at Passive Income MD, he’s all about this model. He’s all about the cash flow model. Big shout-out to him. Awesome guy. His idea is that, hey, when you’re generating enough cash flow every month to support your lifestyle, you are now financially free. You’re financially independent. You can live life how you want right now. A lot of people do this in real estate. Peter’s done this, in large part, through real estate and angel investing and investing in other companies. He does do some traditional kind of stocks and bonds stuff, too. But current monthly cash flow, that will provide you freedom faster.
I don’t like depending on that model completely because I want to have secure financial freedom in the future as well, and not have to depend on current cash flow every month and find new opportunities to do that. That’s why I do a hybrid model. So the old traditional model, financial independence model, low-cost diversified index funds, all about it.
So get to that third pillar of work-life balance, this is what we need. This is the gas that you put in the car to get to the destination of work-life balance. While I knew I needed to save, to have gas to put in the car later in life, which is the first part of the Hybrid Financial Independence Model, I wanted to be able to drive that car around right now. I wanted to have a work-life balance today.
This brings us to the second part, which is generating enough nonclinical income, money that you’re not making from medicine to support your lifestyle, or at least a part of your lifestyle right now.
Notice that I said to support your lifestyle. This is an inherent piece of this. The easiest way to accomplish the second part of this model is to spend less money. If you lived like a resident forever, I’m not saying do that, but if you did, if you lived like a resident forever, you lived a $60,000 lifestyle, you ignored Parkinson’s Law that we talked about earlier, and you had a mastery of your money mindset and realized that you want work-life balance and you want to live on 60 grand a year, but you earned 300, you don’t have to work very much as a physician to make 60 grand a year, right? So that allows you to go part-time pretty quickly, or to find balance pretty quickly.
That’s the simplest version of this, but I’m not frugal. That’s not my style. I don’t want to live a $60,000 lifestyle, okay? I like nice things. I like to spend money. In fact, I encourage people to spend money lavishly on things they love. If you like to travel, man, spend 20, 30, 40, $50,000 a year on travel in a heartbeat. I don’t feel bad about that at all. Go do mission work. Fund it yourself, spend lots of money on that. Help other people, if that’s your thing. Go buy a car. There’s nothing wrong with buying cars. Don’t listen to what they tell you. I’m a car guy so that’s always something that’s a sore spot for me. Yet, as I’ve mentioned, I’m not the frugal type. So if you can live the $60,000 lifestyle, definitely going to get you there quicker, but that’s not me. May not be you, either.
Enter here the idea of cash flow, nonclinical income, physician side gig, side hustles, whatever you want to call it. The monthly cash flow can come from a variety of sources. For many people, it comes from real estate.
Not for me. I’m not a real estate guy. Never have been. Not going to be the real estate guru podcast. This is never going to become that. Though I’ll take a minute to point out that there are other ways to make money, including service industries, like coaching or content industries, like creating online courses that provide tons of value to other people.
So back-of-the-napkin math, just to show you how this, kind the second part of this model works, let’s say that you earn $300,000 a year and that you want to go to 0.9. You have to come up with $30,000 in order to do that and to save the same amount of money and live your current lifestyle. That would support a 10% pay cut at work. So when you do back-of-the-napkin math, and you realize that you got to come up with that money in order to have a half-day off every week or to have one day off every week, that’s dependable for you and support your work-life balance you’re looking for so that you can coach the soccer team.
How Money Fuels Physician Work-Life Balance
I’m going to coach Wesley’s soccer team soon. That’s an example of work-life balance. I love it. Wednesday nights, find me on the soccer field right before my Alpha Coaching program. So I’ll be a good dad. I’m going to go home, put my kids to bed, maybe cook dinner, eat dinner with my family, my wife, Kristen, the other two kids. Then after they’re in bed, I’m going to coach. Love it.
Or I could take Kristen on a lunch date that day. We do that all the time. In order to do that, in order to have the half-day or the day, you need to generate $30,000 or $2,500 a month in monthly cash flow.
Now, when you hear $30,000, you’re like, “That’s a lot of money.” When you hear $2,500 a month that you have to create, it’s not quite as bad. That’s definitely possible. You could generate that in a variety of ways.
Or let’s assume that you make 300 grand and you want to go to 0.75. Guess what? Now you got to come up with $75,000 per year that’s not coming from your clinical income, that doesn’t trap you in hours, that allows you to find a work-life balance. But I realized that being in my situation or close to it, that if I could swing that, I get two days off work reliably. In order to support that change in my income, now I need to earn $6,250 every month.
When you combine the first part of the Hybrid Financial Independence model that provides financial future security. The second part of the model, the cash flow model, allows you to have financial freedom now to take back a part of your time, for example. If you put those things together, now you can enjoy the journey while you also prepare for the future. You pay your future self first and then you still enjoy it. You have your cake and you eat it, too. Even if they tell you that you can’t, you can’t do it. I’m doing it now, you can do it, too. When you grasp both parts of that model, you realize that you can do both. You just need some cash flow for your lifestyle.
The options are endless. While my preferred route is online physician entrepreneurship, and I love coaching people on how to do the same thing, how to become an online course creator or coach, and how to build a business that’s actually profitable, your path to generating monthly cashflow is completely up to you.
It might be real estate. It might be syndication, active management, for example. It might be medical-legal work. It might be chart reviews. It might be any number of things, creating books or podcasts or blogs. Also a big fan of those, obviously, since I do those myself.
The 3 Pillars To End Physician Burnout
But when you put all three pillars of this back together from the post and this one, and you do them in order, you master your mindset, then your money, then your life, your mindset because changing your situation without doing that will not make you happy, your money because that’s the gas that you put in the car to then master your life, that work-life balance that you’re looking for. When you master all three of these pillars, you can live life on your terms.
This is what you need to do in order to practice medicine because you want to, not because you have to. How to do it will likely require help and guidance. It has for me. That’s, ultimately, what I’m all about in the Alpha Coaching Experience, helping other doctors practice medicine because they want to, not because they have to, through coaching on your mindset, your money, and your life. Fundamentally important to get help along the way.
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