[Editor's Note: As a doctor, you might have little time in your life to think about the best way to pay for your purchases. Credit cards make it easy—and these days, it’s so very simple to earn cash back or travel points by using the one that best suits your everyday needs. Check out WCI’s recommended list for the best credit cards that help high earners gather rewards. After all, if you’re spending money, you should also be making it profitable for yourself.]
By Dr. James M. Dahle, WCI Founder
One of my financial regrets is that we never got around to going out for a really fancy dinner when we became millionaires. I don't know why, but I just wish we had done it. I resolved afterward to make sure we celebrated our financial milestones better after that. However, thanks to the success of this whole White Coat Investor enterprise, we basically blew through all of our other relevant financial milestones within a year or two and now really have none left to celebrate. Kind of a letdown, really.
It's like you spent months training for a marathon and busted your butt for the first 13 miles and then found out that you would be running the last 13 on one of those moving sidewalks at the airport. And the sidewalk is moving at 15 mph. You're grateful, but it does feel a little bit like you didn't really earn that Boston Marathon qualifying time.
14 Financial Milestones Worth Working Toward
At any rate, I thought it would be fun to write a post about the typical financial milestones that physicians and other high-income professionals reach. I have placed them into a specific order, but some people will hit them in a different order. That's perfectly fine. Some may not share some of these goals, or they might have others. I hope the list provides you with some intermediate goals in the financial aspect of your life, and I hope you celebrate each of them as they are reached.
#1 Becoming Worthless
The vast majority of physicians and most other high-income professionals leave training with a negative net worth. I encourage them to live like a resident for the first 2-5 years of their career. I remind medical students and residents all the time that they are the poorest people in the world. A net worth of -$300,000 is far worse than zero. Getting back to broke—through a combination of saving, investing, paying down debt, and perhaps even having your home appreciate—should be one of your first financial goals, and it's definitely one that should be celebrated. Plus, it's one of the few on this list that you can openly brag about in real life without looking like a punk.
More information here:
We’re (Finally) Broke! Why Being Worthless Feels Amazing
#2 Buy a Home
One of our financial goals was to buy a home. It turned out not to be a great financial move—at least the first couple of times we did it—because we were not in a stable, long-term social or professional situation. Buying our dream/doctor house was a big goal for us and one we worked toward for over four years, primarily saving up the 20% down payment. I think if your home-buying experience was like ours (at least on our third attempt), you should celebrate it.
My 7-year-old on his first-day skiing black diamond runs without falling
#3 Reach a Net Worth of $100,000
That $100,000 figure is a nice round number. I think nice round numbers should be celebrated. There aren't very many of them.
#4 Student Loans Paid Off
Here's another big one. It was really fun to be with one of my partners at work as he paid off his student loans online. Due to some miscalculation, his last payment was something like 27 cents. Paying off the mortgage on your brain is an awesome financial milestone. Celebrate it!
More information here:
Student Loan Payoff Celebration
#5 Retirement Portfolio of $100,000
When it comes to saving and investing, the first $1,000, the first $10,000, the first $100,000, and the first $1 million are the hardest. The second one DEFINITELY comes a lot faster. After a while, another $100,000 isn't a big deal to you, but that first one should be celebrated. As a physician, I don't know that you need to celebrate your first $1,000 and your first $10,000, but that $100,000 mark requires some work. My records show we hit it just before the 2008 meltdown. No wonder we didn't celebrate it! That was back when 401(k)s were becoming 201(k)s.
#6 $500,000 Net Worth
Half a million is a big deal, and it's more than the average net worth of Americans of any age group. It should be celebrated.
#7 Buying Your First New Car with Cash
This may or may not be on your list, but it was on ours. There is something cool about walking into a dealership and knowing you can buy whatever you want in there, right now, with the money in your checking account. When the salesperson starts talking about financing, you can give them a look that says, “Finance a car? Do I really look that poor?” You can celebrate this one by going on a road trip.
#8 $1 Million Net Worth
This is another big one. While being a millionaire today is nothing like being a millionaire in 1930—or even 1980—it is still a number that means something in our culture. Besides, the greatest reward of becoming a millionaire is not the amount of money you have. It is the kind of person you have to become. Don't make the same mistake we did. Figure out which restaurant in your city costs the most and go eat there. We did eventually go and eat at that fancy restaurant—and it was really good.
More information here:
Physician Millionaires – How’d They Do It?
#9 Retirement Portfolio of $1 Million
Most readers of this blog will hit this one within a year or three of #8. Just in case you need another excuse for a celebration.
#10 Be Done Saving for Retirement If You Work to Age 65
This one is a little bit subtle, but as I have written in the past, you can be done saving. Basically, if your retirement portfolio, with no new contributions but with additional compound interest at a reasonable rate, will support you from 65 until death, it's worth a celebration. If your number is $3 million and you assume 5% real returns, that's $886,000 if you're 40, $1.4 million if you're 50, and $2.4 million if you're 60. That's a pretty good feeling to know your retirement is already taken care of and that now you're only saving for an earlier or more lavish retirement.
#11 Pay Off the Mortgage
For this one, you could always have a mortgage-burning party but I'd opt for celebrating with close family or friends, sharing on social media, or making a video!
#12 Have Enough to Retire Now and Be Able to Cover Your Basic Needs
This is probably the first milestone that could be called financial independence. If you never work again, you can maintain your basic standard of living. You can keep a roof over your head, the lights on, clothes on your back, shoes on your feet, and food on the table.
More information here:
8 Things to Do with Financial Independence Besides Retire Early
#13 Financial Independence at Current Rate of Spending
This definition of financial independence is probably more relevant to you, unless you're really a Frugal Freddie. This is when you can continue to spend exactly as you spend now without ever working again. That seems worth a celebration—like a trip to Europe or at least to the Caribbean. And if you want . . . don't bother coming back. Or you can celebrate by flipping off the boss and walking out the door.
#14 Financial Independence at Desired Rate of Spending/”Enough”
Some of us would like to spend a little more on something we think would make us happier. Maybe it's another international trip every year. Maybe it's a cabin up in the mountains or a lake house. Who knows? But when you get to this milestone, there is literally nothing you can spend your money on that will make you any happier. You understand the concept of “enough,” and you have achieved it.
For more stories on white coat investors who have reason to celebrate and who can help inspire you, check out the Milestones to Millionaire podcast. A new episode is released every Monday!
What do you think? Which of these milestones have you passed, and which ones are you still looking forward to achieving? What other milestones would you add to the list? How have you celebrated your milestones? Comment below!
[This updated post was originally published in 2017.]
#11 should be number 8…. if you’re not that good with money ???? ????????????????
One that I would add as a #0.5 and that I look forward to is simply the change from a negative to a positive trajectory when I finish residency (i.e. I start having an increasing, rather than decreasing, net worth). Might celebrate this one with some Chick-fil-A!
That’s a good one. Hadn’t thought of that. Definitely worth a chicken sandwich with a pickle, waffle fries, and a strawberry shake.
Totally celebrating this one. And with some sweet moonlighting opportunities, I’ll hit it in year 3 (of 4) of residency. But I’m also celebrating much smaller milestones to help the kiddos stay motivated during all the lean live like a resident years.
We’ve gotten to #10 before the age of 35 and celebrated by both going part time
We anticipate completing #11 in the coming year, #12 and 13 by age 40, and # 14 by age 50.
We are hoping we will be healthy and happy enough with our jobs to continue working part time (perhaps with further reductions) beyond age 50!
Great post. I Wish that I had recorded these milestones. I remember 100k. I remember 250k because that enabled me to quit a job I hated and move back to my home town in 1992 (age 34). I remember 3.3 mill because that was the peak of the dotcom era in 3/2000 (age 43). In 2008 I was back to 3.7 mill. I crossed 5 mill at age 56 and decided this was enough and quit OB and went to 3 days per week. These numbers are liquid investments only so no property included or hospital investments. I celebrated the decision to quit OB. Funny I can’t remember the age I paid off my house or the first Million.
Thank you for sharing these numbers again.
I get confused because “enough” is hard to define. There is always more.
And we are not planning to buy a house for a long time.
The story about getting to 3.3 M and then down to 3.7 M, 8 years later – good reminder to know the long term perspective of it, and very humbling.
I think 5 M is a nice round number to aim for “enough”, and then letting it grow. Because it can handle a dip down to 3.3, and anything in between. I love my work and I will be doing it till I die but there is a big difference in quality of life when you can afford to work less.
Great list! I have been lucky enough to hit most of these, but have only celebrated them in my head.
I do plan to celebrate a variant of #10: when I reach about 60% of my final nest egg number, I plan to stop my “extra” retirement savings and go part-time—still making 401(k) and profit sharing contributions. Assuming 5% returns, it should take about 8 years to reach 100% of my nest egg.
You forgot #15: eight figure portfolio, bottle of Dom Perignon to christen your yacht, and first class flights for the rest of your life.
I’ve never been one to celebrate these milestones, and I wasn’t paying all that much attention until recent years. Like you, we did launch from #8 to #13+ thanks to this Bull market and the power of compounding.
We’re probably at about 13.9, but I don’t know that I would ever be able to honestly say “there is literally nothing you can spend your money on that will make you any happier,” because I don’t think I would ever turn down additional money. If I don’t have a use for it, I’d be happy giving it away.
Cheers!
-PoF
#14a Financial Independence for 1 or more nonrelatives, at their Current Rate of Spending. Ie charitable support of others who can’t support themselves
We definitely celebrated when the net worth moved from negative to zero. I agree, we do find reasons to celebrate when we reach each of our financial milestones.
The downside of reaching more milestones? Except for an even smaller group of people, this means that we’re all getting more gray hair (or losing it). 🙂
Great post! As anti-climactic as some of these feel when you cross the threshold, they are indeed milestones deserving of celebration, confetti or no confetti.
Oh man, I can’t wait until I’m worthless! 🙂 We’ll actually be worthless here in about a year, once we vanquish $45k in student loans. It’s gonna be great! 🙂
A great and noble list
I would add 14b “when your portfolio drops by 30-50% and you still are at 12 or above on the list”
I know more then one FI physician during the tech bubble and also in 2008 who retired only to go back to work as their fortune shrunk to a level that no longer supported #12.
I would also expand FI and expenses to include things like long term care for your aging parents, children who fail to launch, unforeseen expenses that you may not have control over. Private college tuition at 64k a year (my kids are approaching that age and luckily I have saved enough) because “just go to a state school” doesn’t work for my dyslexic but very bright daughter.
I am sounding like the old curmudgeon but at the old age of 50 with almost 8 figure net worth I see myself as neither rich or secure in a turbulent financial world.
My wife and I who are very frugal do an exercise every 6 months where we model our portfolio at 50% its current worth and talk about how that feels and what our real risk tolerance is to volatility. Having watched our well diversified portfolio in October of 2008 drop to unimaginable levels once is very sobering. We all say we know it is coming and can stomach it but having been through it once for real is different then abstract trust in the markets to rebound.
It makes me sad to think one of my readers has almost $10M and doesn’t feel rich or secure. This post might help:
https://www.whitecoatinvestor.com/10-ways-to-feel-rich/
Agreed. If you don’t feel secure at $10M of likely liquid assets as a doc with presumably a stable, high paying job, you are doing it wrong. $10M of illiquid assets as a tech entrepreneur, I could understand.
If you don’t feel secure with $10M, more money isn’t going to fix that.
You got. I have a partner with over $11M and won’t retire because he’s not sure it’s enough and doesn’t know what he would do with his life at the age of 66. Money is not his problem.
Correction…You got it.
I’ve got to say that, at age 52, and with >$9 million in fairly liquid assets (doesn’t include our house and part-ownership in two medical buildings), I feel like I can empathize with JLO. $10 million is not the same as it was even a few years ago when our government increased the monetary supply (M2) by 40% in one year(Jan 2020 to Jan 2021). We call it “inflation” but “currency devaluation” is a more accurate term.
Now, don’t get me wrong–I definitely still consider myself financially independent, and I’m only working the hours I want to, but I’m under no illusions that my (our) future financial stability is guaranteed.
Go spend some of that money and quit sitting around counting it and stressing over ‘what ifs’. You’ve won. You’ve acquired more resources than anyone but a fraction of a percent of people ever have in the history of the world.
Sure, continue to be diligent, but go live a little. If the Norks decide to start a nuclear war tomorrow or some other calamity befalls the world, I don’t know what will happen to you portfolio, I don’t know how your asset mix will fare, but I suspect you and your spouse will look at each other and say, “Guess we should have enjoyed that bounty a little bit more.”
Fun post to read. We did record and celebrate these milestones!
Still remember graduating residency with only $1,000 in checking and 6 figures in debt.
Didn’t learn a thing about money until I one day noticed $100,000 in bank checking account.
Found this website.
Student loans gone 38 yo
Mortgage gone 39 yo
Million $ 39 yo.
Went out on a boat with friends this weekend. Took off from their beautiful lake home. I absolutely could not afford to have that lifestyle and likely never will. I feel comfort that I will likely always have enough to survive, but even after the above milestones, I do not feel rich. It took me 24 hours to realign my brain to not even want that stuff.
about at #12 now, but feel eons away from # 14.
I celebrated when we got to a positive net worth. It happened twice in a 5 month period with the dip being when we sold our old home for a mild loss and bought a new (and expensive home). Missed the 100k in stocks mark….the next big celebration for me is when the student loans are gone and then a net worth of 500k….So I will be at number 6. I estimate it to occur by the time I am 40 (3 years from now).
Even though I can walk in to most dealerships and buy any car I want with cash, I still love the thought of “winning” on any deal. I would never say “Finance a car? Do I really look that poor?” ….And I know you meant this in jest. But when I am car shopping (which is only about once ever 8-10 years), I prefer to go in to the dealership in ratty shorts, an old T-shirt with my kids and talk about how tough it is to think about buying this car and paying for my kids’ college. Then, after all of the negotiating when they ask me how I want to finance, I simply state “No thank you, I will just buy it” Drop the check and walk out. 😉 WIN
I guess if you like the game. I’d almost rather pay a small premium, have the car delivered to the house and never step foot in the dealership. Not an enjoyable experience for me.
We bought our last vehicle w/o ever entering a dealership — Vroom.com — and payed cash. Nice feeling.
Ok…Agreed, buying online is probably the better way to go from a time investment perspective…But if I have to go to a dealership, I want to feel like I didn’t get raked too much.
Ah! Buying a car with cash is one milestone we did hit… but the real win was buying the brand new car… and putting as much of it as we could on our cash back credit card. Which we paid off immediately, of course, or else I don’t think it would have counted as a POSITIVE milestone! (ye gods imagine the interest otherwise!)
I wasn’t paying attention at $100K or $500K, but we’re zero’d in on when we pay our condo off. And I just passed $100K in my taxable brokerage so I did notice that though I haven’t done anything to celebrate.
Surprised you got them to allow you to put much on a credit card. I’ve never been able to put more than $2-5K on one at a car dealership.
Our credit limit on our cash back card was only $8K so it definitely wasn’t the whole cost of the car! Still, you know, free (to us) money.
I’ve been looking in to this I guess my question is how are you deciding on the car? Are you doing this without a test drive or does a partner own the same car so you can test it?
I hate even having to go to dealerships to test drive the car they want to talk so much when I could decide on 10 minutes either way.
You are just wasting your time unless you have a terrible credit score. Dealer doesn’t make any money on financing prime customers.
Also not sure what fun it is to waste the time of a car salesman. That guy whose time you are wasting? He probably makes less a year than the price of the car you just bought. Hooray for being a big shot.
New car found on line. Delivered to me by my husband. Very easy
HA! That was funny!
I am never going to let my wife read what Hatton1 said here
Closing in on #6, really looking forward to #10 because it might happen before we hit #9. Definitely celebrated net worth zero. No clue when we hit 100k. Sitting at a car dealership as I type this. I am one of those suckers that gets service contracts and extended warranties on cars because if anything goes wrong and I am working I just want my wife to call toyota or aaa. Routine oil change today but with new houses being built nearby we are already money ahead on the tire road hazard insurance.
Good list! I made a similar list for our family last month when I realized we had achieved #6.
1,2 and 3 happened in the first year of practice – despite having found this website during fellowship we still went ahead and bought the “doctor house” right away for public school district and commute reasons in a HCOL area. #5 happened in third year of practice, but we stagnated somewhat as we moved to my dream job which came up surprisingly. Now I have less pay, more work, and more bs-isn’t the academic world grand? Still totally the right move.
As above crossed #6 at the start of my 4th year in practice this month. 35k in loans remaining, but the interest rate is less than my mortgage so I am in no rush to pay them off.
My goal is to get us to 1M in three years (will be 40!), in addition to fully funding both kids 457s. Should be achievable, but a downturn would obviously trip that up, but simultaneously be a blessing for those of us moving into peak earning years.
Long term goal is to move to 3 days a week with 1-2 extensive trips (1 month) per year within 10-15 years. Not sure how that will work in either the academic or private worlds honestly. Perhaps not realistic. First step will be achieving financial independence, which will give me the ability to work towards it. Love what I do, but once I have achieved mastery, I know I won’t be as interested in doing it as I am now.
This post ended up in the spam folder, I have no idea why. Harder to find them now that I’m getting a lot more spam comments after turning off Captcha this weekend.
You might plan on fully funding (whatever that means) the kids 529’s, 457s for them might get a little tricky.
That’s the one. So many numbers here in America! Don’t worry have both!
I remember reaching #9 ($1 million) in early 2008…then watching it drop. Oh well, I thought. Kept making biweekly investment in Vanguard 403b target fund, and it is amazing how quickly it bounced back and kept going. I always mentally reduce value of equities by 50% when thinking of retiring, thanks to that experience.
I am a primary care doc who finds that financial penalties based on quality metrics take much of the enjoyment out of medicine (really? I pay a penalty because my patient with diabetes chooses to smoke?). I am happy to be at #13, and to have the freedom to move on to life’s next chapter.
Sweet! I’m at #5! Although… I didn’t have student loans so I got to skip that step! That next step is going to be awhile down the road. Time to hit that accelerator!
Great list. I also regret not noticing some of these. I think there are two reasons many physicians don’t stop to celebrate a milestone: (1) We’ve learned to put our heads down and keep plowing away without thinking too much about how long it’s going to take (that’s a survival strategy while in training). (2) We’re not keeping score AT ALL. When I began my career, I had not given any thought to any of this. I had no financial goals to speak of other than to be careful and start saving. It’s a bit like starting to play football and not knowing the rules or how to score, so you wander around the field at first. Then you finally develop an offensive and defensive strategy, you learn to stay in bounds (budget) and use your blockers (tax advantaged accounts), and begin racking up touchdowns. Sometimes you’ve “accidentally” already scored several touchdowns before you even know what’s happening! 🙂 Hooray for football season! Go Cougars!
Nice post. $1M does have a nice ring to it even though it doesn’t mean as much as it used to. As a kid I always thought I would have it made if I had $1M, but now it is just another milestone on the way to financial independence.
Given the childhood dream of having $1M, goals for me have been $1M of net worth, $1M of liquid assets (i.e. not including home), $1M in retirement, and $1M of taxable. Many of these occcur in fairly rapid sequence over a few years, but it always feels good to set and reach a goal.
I also find it useful to break up my goals into:
(1) Total Net Worth (includes home equity and rental property equity)
(2) Liquid Net worth (retirement accounts, savings accounts, taxable account)
(3) Taxable Account Net worth
If your goal is very early retirement, you’ll likely be living off your taxable account way before you ever touch your retirement accounts.
You should do that whether you retire early or not, but not because of the age 59 1/2 rule.
https://www.whitecoatinvestor.com/how-to-get-to-your-money-before-age-59-12/
I like your list. Mine has been similar. I also have goals of: 1) 300k in kid’s college fund (which will let her go to any college she chooses and potentially college plus grad school if she chooses wisely); 2) getting a letter from Vanguard Flagship *Select* services (a particularly ambitious goal since my 401k is through Fidelity, requiring heavy lifting in taxable….).
I celebrate milestones by raiding my stash and opening an expensive bottle of whisky. Which begs the question–do I also get to celebrate opening an expensive bottle of whisky by going to a fancy dinner?
Great comment and of course you get to determine when and how to celebrate, dinner out for opening a great drink sounds fine to me.
Yes – or how about making a charitable donation at each milestone? ????
We hit #6 about 2 years ago. On our way to 1 million which we’re hoping to hit in 5 years. Back to #6. What percentage of Americans actually hit 500k networth?
Bear in mind the list is aimed at high income professionals, not the average American. But anyone can set their own milestones.
Well, about 9% or 1 in 11 households have millionaire status according to several articles, depends on some assumptions. However, that includes young households. Trying to figure out who eventually makes it is tough to do, but it seems to be roughly 1 in 7 or 14% of households eventually make millionaire status, in roughly 2010 dollars – so it’s reasonably common. I would guess at $500K net worth, you’re talking perhaps 1 in 6, or 17%?
Paid off my $185,000 student loans about four years after residency.
Bought a bottle of Dom Perignon
Drank it with my wife on a Tuesday night in our pajamas. (she thought I was crazy for spending $200 on it)
I think a bottle of Dom Perignon in pajamas is a great way to avoid forgetting the occasion. We didnt do anything for my loans because we still have my wife’s. I may copy your idea when we hit that mark.
12 through 14 can be somewhat fluid and depend a lot on your stage in life. Right now, with a child in college and another soon to be, we are at or near our point of highest spending. 6 years from now, assuming a pair of successful launches, our total current assets would place us solidly in the 14 camp. Until then, however, no matter what the net worth number, we feel like 12 or 13.
I might add being able to give some amount to charity each year without concern. Say 10K or maybe more. Being frugal I always think of the value vs the costs of most everything, I would like to stop but somehow it is difficult.
I find that many people who don’t give when they don’t make/have a lot don’t tend to change later. If giving is important to you, I encourage you to get started before you feel like you have enough to give.
+1