¶ Podcast Welcome and Updates
This is the Whitecoat Investor Podcast, Milestones to Millionaire, celebrating stories of success along the journey to financial freedom.
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This is Milestones to Millionaire Podcast number 263. If you're a high income physician, you already know how hard you work for every dollar. The question is, how much of it are you actually keeping after tax? GELT is a tax firm focused on proactive tax strategy, guided by expert CPAs and optimized via in house AI tools.
They work with physicians and practice owners to use the tax code more intelligently so your entity structure, deductions, and income timing all work together to help you keep more of what you earn. As a White Code Investor listener, visit WhitecoatInvestor.com slash GELT To book a free strategy intro and receive 10% off your first year with Gelt. It's time to start using your tax plan as a lever for growth.
Okay. Few updates. By the way.
We have a new partner for property and casualty insurance called Rate Insurance. We launched this back in February. Okay. And this is an even better option for getting your home, auto, and umbrella insurance and making sure you're not overpaying for it. So if you're not shopping your rates each year, you're probably overpaying.
Rate insurance will search a hundred plus top carriers to help you find the best rate for your property and casualty insurance. Go to whitecoatinvestor.com slash rate. Okay, this is the Milestones to Millionaire Podcast. It's all about you.
We're trying to serve you here. We're trying to highlight what you're doing. If you would like to be a guest on the podcast, if you want to celebrate one of your milestones and use it to inspire others to do the same, sign up at whitecoatinvestor.com slash milestone.
¶ Guest's Milestones and Net Worth
We're also combining these episodes. with financial boot camp episodes. Now financial bootcamp also stands on its own. This is a separate podcast we have now, right? To get people up to speed, even though all they want to do is listen to podcasts. We put all the basics into podcasts
But we're going to include one of those episodes on the back of a lot of these milestones episodes as well. And today, after we finish, stick around. We're going to talk for a minute about health insurance. It's actually pretty amazing how little doctors know about health insurance. But first, let's do a pretty awesome interview with a white coat investor that has uh accomplished some pretty awesome goals.
A guest today on the Milestones to Millionaire podcast is Jefferson. Jefferson, welcome to the podcast.
Thank you. And thank you, Jim, for all of the work that you do for this community.
It's our pleasure. It's wonderful to uh be here with you. But let's introduce you to the audience. They all know me already, but they don't know who you are. So tell us what you do for a living, how far you are out of school, what part of the country you're in.
Nurse anesthetist. Um I work up on the Canadian border in the upper Midwest, and I'm in a few different critical access hospitals. Twelve years out of school. I've worked in a few different practice environments, but this one I think is the most fun for me, being the only anesthesia provider in the county oftentimes. is um a responsibility and a and exciting and is something that I really like doing.
Okay. And uh m married, children, partner?
Yeah, uh married for about the same period of time. We have a little bit longer, actually. We have a 13 year old and an 11 year old.
Can your spouse work?
Uh she does. She works in the public schools. The majority of our income comes from the anesthesia income. She's decided not to get too, too involved in the public education. uh machine, if you will. She stays kind of on the periphery.
Okay, fair enough. Okay, you uh you've accomplished really a couple of milestones today. Tell the audience what milestones we're celebrating with you today.
Well, we recently hit a million dollars in our workplace retirement accounts.
Congratulations.
That was just in the last month or two actually actually since I signed up to be on the podcast.
¶ Transitioning from Financial Advisor
The bigger one that kind of looms in my mind is back in about September, we decided to manage our own finances. We had been with a retail financial advisor. And we decided to move on from there and move our money into a different brokerage so that we could manage our own money.
So I want people to get this message out there. The important part of this message is once you sign up to come on this podcast, you actually get wealthier. So that that's the key point.
Yes, we had one one comma before. Now we have two commas and that that account, so
Okay. Well, that's pretty awesome. Congratulations on being a millionaire. Thank you. As a kid, did you ever think you'd be a millionaire?
Oh no way. Uh twenty years ago I didn't think I'd be a millionaire. My my hometown is a university town and I never thought I'd be able to own a house and now we pr we'll probably get to it, but we own more than one now. And part of that is uh what's the term you use? Geographical arbitrage is uh it's cheaper to own a house here.
You're you're not in San Francisco, you say.
No.
Okay, give us a rundown. What's your net worth look like? What how much is in, you know, various types of retirement accounts and how much is in various kinds of investments and your home and that sort of
It breaks down to we have about 1.8 million in assets and about 200,000 in debt. One million is in the retirement accounts like like I mentioned. And then we have about three hundred thousand in various cash and rainy day funds. And then we have about Four hundred fifty thousand dollars of real estate uh valuation minus one hundred fifty thousand in mortgages, so about three hundred in equity in those homes.
So uh is some of these are investment properties?
Well, we have a house It's gets complicated, but we have two
Sounds like you've got multiple homes to me.
That's what I feel like this is goes. Let's put it this way, Jim. I drive a lot, uh,'cause these hospitals are an hour or two apart and I like to I like to be involved in lots of different places, but The main hospital where I work is about an hour and a half from home. So we have two houses in our hometown and then I did buy a house in the town where I work most often as well.
Okay. But y w uh is one of them in your hometown you're rent now?
We do rent it out but we also use it for personal uses. So we use that as a guest.
So it really is a combination of a a consumption asset and investment. Okay. Yeah. Um all right. Uh and your mix of investments, you know, when when you look talking about your traditional investments, what's your asset allocation?
Yeah, um I just looked at it this morning. We have about eighty two percent equities and eighteen percent bonds at the moment, uh mix of domestic and international.
Very nice. Okay. Now some point last fall you decided you didn't, you know, want to use the financial advisor you had been using.
¶ Strategies for Financial Success
Well, I will say this podcast and others have given me the confidence to do that. And so I want to express once again my appreciation for that. But The main thing is I didn't think he did a bad job, but I did feel like he had mixed incentives. we ended up triggering the pro rata rule while while I had him and that kind of opened my eyes a little bit and his suggestion was to open a solo four oh one K.
But at the same time, I still have uh workplace four oh one k four oh three B at a W two job where I work occasionally that takes incoming rollovers. And so I didn't really see the point in spending money to set up a new account when I already had the mechanisms to roll that money over from uh SEP IRA. And then the other thing was we had a variable universal life policy with
Is this advisor sold to you?
Yes, yes. And so we cashed that out because I realized that it wasn't ever gonna get better. Um that waiting it out wasn't gonna make it better. And so we took the money out of that and we uh were not gonna look back on that except for learning opportunity.
Okay, so you were essentially you were essentially getting bad advice. You you had mistaken like I did, you'd mistaken the commission salesperson for a real financial advisor that that just gives you advice for fees. Yes. All right. Well you know, typically I've found people's confidence lags their knowledge. by about a year when it comes to doing stuff yourself. Did you find that was true for you?
Yeah, I would say that the confidence definitely lagged the knowledge. I I started learning about personal finance in earnest when we paid off our student loans and suddenly We had three to four thousand dollars a month that was no longer going towards loans. And it it didn't really occur to me until that point where that extra money was there that there may be better ways to use it than others.
And so it was at that point we took on a financial advisor, but I've been listening to personal finance the whole time, but really was more reactive and learning about certain aspects of it.
What was the hardest part about uh about going from being you know an advised client to being a do it yourself client?
The hardest part really was divesting of the assets that were left behind because he had he had a larger number of funds that he had invested our accounts in.
¶ Health Insurance Fundamentals Explained
Um, probably ten or twelve per account and figuring out how to move those into the I kinda had a feeling of what funds I wanted them to put them into, but it was a little bit of work figuring out which ones were short term and which ones were long term capital gains and whether I should hold on to any of them or whether I should just fight the bullet and move them all over at once.
W w was i was there a significant taxable account as well where you had to deal with legacy investments? Or w it sounds like most of the money was in retirement accounts and you could just sell them without any consequence.
Most of them were in retirement accounts. We we did have a r a brokerage account with him and and that was that was really the the one that took the most attention to move over. Although I will say five two nines are kind of a pain to move over also.
Uh okay. Well, um what advice do you have for somebody else out there that's going, you know what, maybe I'm not getting great advice either. Uh I'd like to try DIYing it. What should they do before they fire their advice?
Don't go to the advisor in the first place. Prevention is cure. Well, I think... Learn what you need to learn to move and then don't wait any longer. There's no you know, if you if if you know that's what you want to do, just do it. I I sat on it for longer than I should. If we had moved on it sooner, we would have done better.
Did you come up with a written investment plan at some point, uh, in the process?
Not in any formal sense. I had an idea in my head of what allocation I wanted once we'd moved everything over. We're sort of still working on it'cause this was September and taxes are due and we're kind of figuring out for twenty twenty six what that's gonna look like.
What did your spouse think when you said We're gonna do this on our own. I I'm guessing the fact that you're on this podcast is that you're the the driving personality when it comes to money in the couple. That might not be the case, I don't know, but uh I'm curious uh what reaction you had from your spouse in this project.
Um, we've been married a long time and she she really you know, she's supportive, but I would say I think that there was an element of Well, you wanted help with this. You know, the the reason we took the financial advisor on was because I wanted another set of eyes looking at our finances. And do you really want to take on another project? And my goal in all of this is to keep it as simple as possible. I want it to be easy if anybody else ever has to take this over.
So I think she's coming around to it. But you're right. I do most of the uh maneuvering of our finances.
Okay. Well, you guys have have done a great job, right? I mean, you've obviously saved a a substantial sum of money. Uh you've invested it, your money's grown. What would you say were your secrets to success in becoming millionaires?
Well I learned about the find the White Code and Investor podcast about fifteen years ago from a friend who worked in tech. I didn't start listening regularly until about five years ago. And I would say be proactive, not like me. But be proactive when, you know, I didn't learn about finance until we paid off our student loans.
And I didn't learn about the variable universal life until we had already paid what we were gonna pay for it. So being proactive I think is You know, I know you you send literature to med students and I think that's that's a really good time to start thinking about this.
I think that we overall, yeah, I think we have done a good job. We started investing early, even as we were paying off our student loans. And that was kind of uh toss up because they weren't they weren't super high interest rates, you know. And so we were able to do both at the same time. Don't sweat the small stuff, just put some money away and can and keep doing it.
Yeah, it's good advice. I I mean y you've worked hard, you've got multiple jobs it sounds like, you're right. You went some place that is not that expensive to live, you know, you've got essentially three homes for less than lots of people are paying for one home in other parts of the country.
Uh you clearly carved out a substantial portion of your income. I I don't know if you told us what your household income has been over the last twelve years or so, but in order to to get to uh, you know, a million bucks plus You had to carve out a big chunk of that.
We were we've been in the three hundreds for a few years now. So yeah, we're doing pretty good.
But but even, you know, even just to carve that out, we're talking about, you know, twenty percent, twenty five percent, whatever of your income going toward wealth building.
Yeah.
And uh so you did all the things right. You know, made a couple of little tiny, maybe, you know, slight course corrections. But overall the truth is if we just get the big things right, we we can become successful like you have.
I think that's right.
All right, what's next for you? What's your next financial goal you're working on?
Um, I'm actually in a chronic pain management program. They the hospital up here wants to institute a pain clinic here and my colleague and I are are up for it. So that's that's the next thing. We're at um a couple small hospitals up here and it's uh Most of what we try to do is keep patients locally'cause it's two hours to the next town. So we wanna provide services that they're that they're not cur that they currently aren't providing.
Yeah, will this be an additional side gig or a way for you to consolidate your jobs into one job or a boost in income? Or what do you expect the financial outcome of this is?
Uh maybe a m a modest increase in pay, but mostly it uh it keeps my brain engaged. in terms of learning new skills. And w one other piece of advice that I'd say is uh go somewhere that you can use the skills that you want to keep using and where you can learn new skills because Well, I don't know. For me anyway, I I always enjoy learning new things. And it has, I think, increased the size of our shovel to to do that.
Very cool. Well, Jefferson, congratulations on your success. You guys have done awesome and should be very proud of yourselves. We're proud of you. Thanks for being willing to come on the podcast and inspire others to do what you've accomplished.
Thank you, Jim.
All right, as I mentioned uh at the beginning, you know, this is a fun interview to bring you guys on. You've become millionaires, you've fired your financial advisors, you've paid off your student loans, you've You know, paid off mortgages, you've become a decamillionaire, you've gotten back to broke, whatever your milestone is.
We love to celebrate them with you because they're all individual. You all have a unique pathway. Some of you do geographic arbitrage, like Jefferson, right? He's in a little tiny town in the Midwest. Some of you are in downtown San Francisco. Some of you are in, you know, DC, or you're in your hometown or wherever you are. Your pathway is different. You have different challenges, but you also have different strengths.
So apply your strengths to overcome your challenges and reach your financial goals. This is a single player game. Just because you're a CRNA and you're not a millionaire yet does not mean you're losing this game. But if you're not making progress toward your goals, it's time to get a written financial plan in place and start moving toward those goals. All right, I told you at the beginning we were gonna talk about health insurance. Let's do that.
Understanding health insurance is surprisingly challenging, even for doctors who accept payment from health insurance all the time. But it's important to understand this very important health insurance. First of all, the most important point is this is one of those financial catastrophes. I fell off a mountain a year ago, and when I fell off, I got two helicopter rides. One was covered by the National Park Service, the other one was covered by my health insurance.
My health insurance paid forty-four thousand dollars for that helicopter ride. I hit my annual out-of-pocket maximum before I ever got to the hospital. And when something bad happens to you, whether it's a diagnosis of cancer or a diagnosis of some chronic disease like MS or something, or whether it's trauma like in my case, That bill can run up very quickly and put a huge dent in your financial resources, or even keep you from being able to get the health care you need.
So health insurance is a critical type of insurance. You've got to have it. Don't go bare. There are some health insurance alternatives out there that might be worth considering, but you need some sort of coverage. Okay, don't ignore this insurance. You need to have it. But let's try to understand the different pieces of it. What's the deductible? Right? Deductible is the portion that you pay.
Okay. And sometimes there's a whole overall deductible per year for the policy. You pay the first$500, you pay the first$2,500. Sometimes there's a deductible for each doctor visit, right? Maybe you pay$50 every time you go see the doctor. Whatever, right? Every policy is a little bit unique, but a deductible is your portion to pay before the insurance company starts paying.
And there are also co-payments, right? And this is like the payment you make to a doctor every time you go. If you got to pay, you know,$50 or maybe you got to pay 20% of the cost, that's the co-payment. Okay. And you not only pay your deductible before the insurance starts paying, but then you pay along the way with the insurance company. And then eventually you hit an out-of-pocket max. And when you once you've hit the out-of-pocket max, the insurance is a company's on the hook for the rest.
Like in my case, you know, my ICU bill was$106,000, my helicopter was forty-four thousand dollars, I got a surgery on my wrist, right? I don't know how many thousands of dollars that was. But You know, when you have all that happen to you in one year, you hit your max out of pocket, and then you're not responsible for additional payments above and beyond there. There's also another term that's thrown out there a lot called coinsurance.
And all that is, that's the percentage of costs of your covered health care insurance that you pay after you've met your health insurance deductible. Okay, so it's a lot like a copay, but that's what co-insurance is. You know, just like your employer might make you pay twenty percent of the premiums.
for your health insurance, your insurance company might make you pay 20% of what it's paying or what the costs are until you hit your maximum out of pocket. But once you've hit your maximum out of pocket, that's all you pay for the year. Everything else is free.
Now, why is health insurance set up this way? Health insurance is set up this way so you have some skin in the game. If there were no deductibles, if there was no copay, if there was no co-insurance, there's nothing to keep you from just spending willy-nilly on everything. So the reason they put these in place is to help you to be a little bit wiser consumer of healthcare. Maybe think twice before you buy something that maybe you really don't need or even really want.
But uh it not only keeps your premiums, what you pay for your insurance down, but it allows you to or allows the insurance company to be able to, you know, make sure you have some skin in the game and that you're making logical decisions when it comes to what you're consuming. But at the end of the day, when things get really bad, what you really need is that catastrophic coverage.
You need them to take care of the amount above your out-of-pocket maximum. So buy health insurance, understand how it works. Not only will it help you to be a wise consumer of health services, it'll help you to be a better doctor so you can explain how these things work to your patients. If you're a high income physician, you already know how hard you work for every dollar. The question is, how much of it are you actually keeping after tax?
GELT is a tax firm focused on proactive tax strategy, guided by expert CPAs and optimized via in house AI tool. They work with physicians and practice owners to use the tax code more intelligently so your entity structure, deductions, and income timing all work together to help you keep more of what you earn.
As a White Code Investor, visit Whitecoat Investor dot com slash GELT to book a free strategy intro and receive ten percent off your first year with GELT, it's time to start using your tax plan as a lever for growth. All right, that's it for our podcast today. Thanks so much for listening. We appreciate you out there. We appreciate what you're doing. Keep your head up and your shoulders back. You've got this. We'll see you next time on the Milestones to Millionaire Podcast.
The Whitecoat Investor Podcast is for your entertainment and information only and should not be considered financial, legal, tax, or investment advice. Investing involves risk, including the possible loss of principal. You should consult the appropriate professional for specific advice relating to your situation.
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