[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.]
I remember my spouse telling me we reached #8 when I was 37. I said, no way! I saw the excel sheet and I was proud of us. I do not think our lifestyle changed. We keep discussing to enjoy simple things and focus on family. We splurge every now and then but stick with our budget. Somehow, I have not grasped the concept of FI. It is the fear of the unknown for me-loss of a spouse, disability, illness of a family member. So I’d rather keep earning and saving until I see all kids launch.
reaching net worth of zero has been the best feeling. Actually being able to go “up” finally after so many years.
Having a net worth of -$500k at one point and then reaching a net worth of $0 was an amazing feeling. It was probably the best feeling of all the milestones because it removed a massive bolder of stress. The next best feeling came after having $1million in investment assets. At that point I knew I can retire at anytime living a modest lifestyle.
Financial security increases happiness.
Exactly. Money can’t buy happiness, but it can buy freedom, and that’s a big contributor to happiness.
Exactly. Money can’t buy happiness, but it can buy freedom, and that’s pretty much the same thing.
Great post as usual so sorry I found you late in my career, really celebrate your milestones if you are healthy at each .
I haven’t been great at celebrating. I think it would have been fun to do – and motivating.
Actually, I think I will plan 14 parties now.
What’s next? I want to celebrate something in the future …. It is great “living the dream” but harder to come up with new milestone goals.
Great post. Another milestone not necessarily wedded to a particular number might include when your ideal physician schedule matches your actual schedule. Several examples come to mind:
-WCI cutting out nights completely
-Physician on FIRE cutting to 60% anesthesia schedule this year
-hatton1 cutting out OB entirely and practicing 3 GYN days a week without call
In autumn, empowered by approaching our FI number, I’m cutting to a 50% shift schedule for EM, which will open up time to realize some other interests and opportunities. There are several versions of a meaningful and engaged life I can envision pursuing beyond medicine. As physicians, if we manage our finances well, we have the opportunity to realize more than just a single version of our life’s potential within our allotted time.
“While you’re grateful, it does feel a little bit like you didn’t really earn that Boston Marathon qualifying time.”
Wrong. You’ve earned it.
remember what the marginal utility of wealth means
you gotta preserve that capital upon retirement
we will see mkt collapses
Achieved #10, but can’t say I’ve hit #9 cause a good amount of my net worth is in real estate. Will hopefully hit the rest within the next few years. Don’t know why we haven’t celebrated any financial milestones but you’re right, we should!
3 years out of residency and closing in on #6, although I feel like I got a “moving sidewalk” boost by counting my husband’s 401k- we got married right after residency and I think our combined net worth was right around zero at the time thanks to that
I gave my husband a bit of ribbing about #1 because I married him not long after he finished his fellowship, so I guess I made him worthless. #8 and #9 for him are also via the “moving sidewalk” because about 50% of the $1M milestones came from me.
Well at the end of the day it’s a team effort- benefit of a dual-income household!
Slightly out of order for me:
#7 (bought a car without financing, though it wasn’t totally new) – last year
#1 (becoming worthless) – few months ago
#5 (retirement portfolio of 100K) – 2 months ago, may get to celebrate this again if markets crash
#2 (buy a home) – last week!
Coming up:
#3 (net worth of 100K) – probably 1-2 years
#4 (student loans paid off) – probably 3-4 years
Great list. I think the best milestone is paying off student loans. It feels so freaking good, I’m still happy about it every time I think about it! I took a picture of the payoff receipt and then did a happy dance by myself. I think we’ll hit #6 by the end of next year and we can do #7 whenever the time arises, although the 2008 corolla is still going strong. And I think we’ll be technically “done” saving for retirement before we have 1M in retirement accounts, but we’ll just see what life has in store in the next few years.
Hypothetically speaking if one worked in a highly compensated employed position say $500-600k per year, lived on $40-50k a year, and was only able to defer $18k employee 401k contribution , a $10k employer match and a $5.5k backdoor roth, they could easily reach #14 FI with post tax accounts but be way short in #9- retirement plan savings of $1 milllion.
Ha ha. Have you met many doctors? I can’t talk the ones making $50K into living on $50K a year. Fat chance getting the ones making $500K to do it.
I feel like doctors run into the same financial problems as professional athletes, just on a smaller scale. Our financial quality of life is so repressed during training that a lot of us are like a coiled spring ready to snap. So many of us, including me, have thought, “let me just get through residency. Once I become an attending, all my misery will be rewarded handsomely.” Same thing happens to college athletes who work their rear ends off for measly room and board. Once they get drafted into the NBA, NFL, etc, then it’s Hammer Time.
I think every doctor should watch ESPN’s 30 for 30 “Broke” and read Millionaire Next Door. I really have to thank WCI for recommending Millionaire Next Door few years ago. That book changed my life. What you make isn’t as important as what you don’t spend. I’ve applied this principle to my personal life, as well as my medical practice. Low overhead is so much more important than maximizing revenue or the top line.
If all of our colleagues appreciated this concept, I’m pretty sure more of them will gladly accept $50K living despite making $500K. (at least for the first few years). It’s this delayed gratification, sense of entitlement, and misconception of “there’s more where that came from” that leads to a lot of “under accumulators of wealth (UAW)” in our profession.
Well said Ho Sun Choi.
I have to ask – where did you go eat?
I’m sure you can figure it out with a name like yours!
https://www.lacaille.com/Pages/Menu.aspx?DeptID=50055
that’s the most expensive place in SLC?
come visit chicago for your next milestone dude.
https://en.wikipedia.org/wiki/List_of_Michelin_3-star_restaurants#United_States
https://en.wikipedia.org/wiki/List_of_Michelin_starred_restaurants_in_Chicago
Yea man, it’s not Manhattan or Chicago by any means. Maybe it’s not the most expensive place (I confess I’m no foodie), but it’s gotta be in the top 5. More importantly, it’s a place we drive by every day but had never been to.
i’m not a foodie either TBH.
that said if you are ever in the neighborhood of a 3M star place and you can check it out with the wife i would highly advise. it is really an incredible experience.
Oh this is funny. My wife went there for some school dance way back in high school. Every time we go skiing and pass it she mentions how expensive/neat/rich it is etc. Maybe I should take her there so she can start reminiscing about what a fun time we had there. (I’m a little slow to pick up the hint as she has probably been trying to drop that one for years now…)
Have you been to “The Farm” in Park City? Another great restaurant. I dropped $200 there when I had a net worth of NEGATIVE 400K. When you’re that far in debt, what does $200 matter anyways?
Don’t know about FI, but I definitely regret NOT spending more time having fun in undergrad/expanding friend circle/being a “social butterfly”/taking random classes/dating a bunch and just passing with a B grade. Then take a post bac, completely dominating and making up on MCAT. I have seen this done successfully to believe I “wasted” 4 years overachieving in undergrad at the expense of a more fun experience. A bit off topic but I quickly realized to have fun right now, and spend now, not later.
I’ll be interested to hear how that plan works out for you 20 years from now.
If you can’t have fun in undergrad and still get mostly As, you’re really going to struggle academically in med school. Geez, I was playing collegiate hockey in undergrad and was out of town every other Friday for 3/4 of the school year. If anything took away from my social life, it was that, not studying.
A 3.0 GPA is going to be a big barrier to getting into med school, especially since your science GPA is likely to be even lower. You might be able to pull off dental school with a science GPA in the low 3s, but you’d better have started an orphanage if you want to get into med school with grades like that.
That said, it’s definitely easy for the type As who go into medicine to overstudy. I was amazed at how much longer some people would study for a test as an MS1 beyond what it would take to comfortably pass a test. The law of diminishing returns definitely kicks in. For instance, if the best you’re going to do on a test even if you study an infinite amount of time is 92%, and you can get to 84% after 6 hours of study, and 6 more hours will only get you to 87%, I think I’d rather spend that last 6 hours skiing.
Your last paragraph here is one of my favorites from this thread. My husband and I stress this concept often to our son who is a current M2.
Yes but that’s extra study is needed for Derm and Plastics. If you wanna do ER and ski then sure just pass.
Personal decisions and there is no right way approaching this. Diminishing returns for you but not for someone set on being in upper competitive specialty.
We stress to him that if getting into an uber competitive specialty destroys his work-life balance then best to go with his next choice. Not sure he listens any better than you do, but we say it nonetheless.
Yep. I am with you – not sure if that is the right approach but people reproaching those who do it is “your opinion man”; its their way of studying. And a fact for uber competitive specialties.
Oh and those 6 more hours he can reach 90% and not just 87% which is a difference between an A or a B. Big deal.
Not a big deal to me. But I deliberately chose a med school with Pass/Fail to eliminate the competitiveness between students seen at many med schools. You could get an honors, but most people didn’t spend much time worrying about that. Which turned out to be the right move since residency directors cared far more about board scores, interviews, LORs, third year grades, and especially grades in your rotations in your chosen specialty.
I would need to ski a lot to make up for the fact that I was doing Derm or Plastics during the day. But yea, if you’re dead set on being a dermatologist, you’re going to have to either be brilliant or study a lot more than your peers. But those in my class who ended up in Derm or Plastics spent just as much time playing foosball as I did in med school.
Disagree. Seen many people mess up do post bacc programs improve goa and MCAT and get into Med schools everywhere. This proves Med schools are ok with which means I could’ve done that than work that much harder in undergrad.
Oh and spare me undergrad, all As etc and still play NCAA stuff – dependent on what undergrad and major. Yes I could be music major and get all As. My comment was for engineering or double hardcore majors with pre Med on top. Much harder and at an elite school harder to maintain higher gpa.
What’s the MCAT average at UC Med school? 37+?
Not a plan. Retrospect. And it has worked it for plenty of my friends just fine. They ended up alright in good residencies after partying more than I ever did, messing up more etc. did add 2 extra years but whatever. Fun when young cannot be replaced. Sorry but no 401k is gonna bring that time back.
There is certainly a balance to keep between living for today and living for tomorrow. Just keep in mind though that “having fun now” and “spending now” do not have to be related. Something gives me a strong inclination that the people who want to take out large loans for living expenses in med school and residency because “they want to have fun when young” are the same people who take out ridiculous home loans and buy Teslas as they start their first attending job.
It’s probably a rare individual who is a high spender in med school and is then frugal when an attending. That feeling of “have fun when I am young” will never go away because you are always younger today than you are tomorrow
You are correct. Not about to take loans out to get my fun. Don’t need that. Mostly what the struggle isn’t money, its time. Time management is the elusive have all power I always crave. So much harder than just making more money. I guess I am with Jeff Bezos, Musk et al, trying to find elixir of youth, my best memories are from undergrad, so wish I did more of that then spending time getting that A+ obsessively.
As I recall, you’re a med student or resident. The good news is your best memories are likely ahead of you.
An attending now 🙂 Since July. So far so good…
Congrats on finishing. I think I had you confused with someone else.
I’ve met a few, but I agree they’re rare.
Spending habits can vary so much that it’s difficult for me to generalize. My parents reminded me the other day that I was a spender in my youth and as a young adult. Now over 50, I am very content driving my 12-year-old Subaru to work today. I will splurge selectively, having just returned from a family trip to Iceland that cost close to 20k.
I’m still working on getting to worthless while also working on my first 100k. I’ll likely celebrate both as you suggest. Breaking financial goals down into smaller goals is a really great idea.
#10 took me a minute to process what it meant, since DH and I hit that target. Realizing that we’re done saving for the usual retirement a 65 y/o, and instead every contribution is moving our early retirement date closer – it’s making me a little less tolerant of the B.S. at work!
That # 10 is subtle. But very powerful.
I have done this calculation with a few physicians, and once you do the compound interest calculation, it is amazing to see the effect. They can’t believe that they are actually done, especially if you put Social Security with it.
Very liberating feeling. Especially when you realize that from now on it doesn’t make a big difference if you put 5 k a month or 9 k a month – your primary investment will do the heavy lifting.
Money may not buy happiness but it will buy a yacht big enough to sail right up next to it.
David Lee Roth
Enlightening post. Nice barometer to see where you’re currently at. And if you just keep plugging away at debt repayment and contributing to investment accounts, almost all doctors will be able to hit #12 with no problems.
Great article on money milestones. I’m a Millennial and I’ve got the first 5 completed. The only one I celebrated was paying off my student loan. I should have celebrated the others. I am on my way to #6 and having a net worth of $500k. That one I will celebrate! After that my goal is to have $1 million in investable assets by my early 40s. And then to have $2 million by 50 and be financially independent.
Good post. We’re around 12-13.
One thing I’ve done since internship year is tracked net worth, investments, and projected future portfolio values based on a conservative rate of return. Thus I knew exactly when I was ‘done saving’ and when we reached other milestones. It also kept us focused on the long run. In addition, by using a very conservative rate of return which has been surpassed over the last 18 years, we’re far ahead of what we projected way back then. That makes milestones fall like dominoes.
Great list! We hit net worth zero in our mid-to-late-twenties, paid off our student loans, and just reached $100,000 net worth 6 months ago (at age 32). This year we are building a house (the first home we will own), and are well on our way to reaching these other milestones. I’m all about celebrating when you hit a big milestone!
Love this thread. We celebrated (&cried) when our student loans were paid off, timed it to pay off both at the same time (7 years after I finished residency). Just celebrated another major milestone: Third (& last) child graduated from college last year, debt-free–lots of tears, then, too. I’m now mid-50s, hubby is early 60s. Our NW is $2.5M, we have been debt-free x 49 months, and plan for retirement in ~ 3-4 years. We both come from humble beginnings, and are still fairly frugal. Spend most of our free $$ traveling, which we love–have played the credit card miles game to serious advantage (pay in full several times per month). Hubby has been eligible to retire for 3 years, with a very nice pension (engineer). We both really love what we do, and hubby says he won’t retire until I do. WCI has been a real Blessing to us–so glad we (literally) stumbled upon it.
Glad to be of service. Congratulations on your success.
Great article! Keep em coming!
There’s a thought that really frames this article:
These are all financial measures, but are they just milestones in a vacuum, or rather important markers for people to set on their path to ____________ (fill in your own ultimate goal)?
Financial consciousness and milestones are helpful when you have goals. Goals are the essence of financial planning.