[Editor's Note: Today's guest post comes from The Physician Philosopher. In case you missed the news, The Physician Philosopher is the latest addition to the White Coat Investor Network. I hope you enjoy his origin story and see why we reached out to him to join the WCI Network. Like the other network members, we have a financial relationship (I own a minority share in each of the network blogs.) Enjoy the TPP origin story!]
The picture is permanently etched into my memory. As we drove away in our minivan, the place where I made many of my childhood memories became smaller and smaller as we drove off into the distance. I would never see any of those friends again, and this was all the result of the first major financial mishap that I would experience in my life. It is one of five mishaps that eventually led me to create The Physician Philosopher blog so that I could help people find a way off the road to burnout through financial independence.
Today, I want to discuss these five negative financial experiences, what we can learn from them, and how it all led to the genesis of The Physician Philosopher blog.
1) Childhood Bankruptcy
When I was a kid, I loved to play baseball with my dad. Even though he walked with a cane due to a spinal cord injury caused by a hunting accident, he would let me pitch baseballs to him for hours. He would sit on a bucket while he caught, and I’d pretend that I was Greg Maddux.
Exhausted from playing catch, we would take it easy in his recliner while we watched TV in the evenings. We usually watched The X-Files.
In those days, my dad worked as a nuclear engineer, and my mom was a homemaker. My two older sisters loved poking fun at me, but they loved me.
Our hearts were full, and life was good.
That all changed shortly after my dad reported a safety concern he found at the nuclear power plant where he worked. His concerns were ignored. So, he went over his supervisor’s head because he felt the concern was too important to be ignored. He worked on a nuclear reactor, after all.
This decision resulted in my dad being let go from his job. And he was subsequently black-balled from the nuclear engineer industry for the next year.
Combining this situation with my parents' poor financial literacy created a bad situation. With no emergency fund and faced with dire straits, they liquidated their retirement accounts and racked up more than six figures worth of credit card debt.
They were hard-working people, but they didn’t know anything about money.
Less than a year later, my parents declared bankruptcy. We would leave that place – and all of my friends – to move in with my grandparents in Georgia.
This was my first taste of what it was like when money wasn’t my friend. And it would shape my hatred for debt later on once I became financially literate.
2) Disability Insurance Debacle
Fast forward 15 years and my first kid is born. Even though I knew very little about money at the time, it made sense to me that getting life insurance was a financially prudent thing to do. I wanted my wife and kid taken care of if I met an early demise.
So, I met with an insurance agent who was the brother of a friend of mine.
This agent said that life insurance was a good idea, but that I should also consider getting disability insurance (DI). I didn’t understand why I would need DI given that I didn’t have an income as a third-year medical student, but I eventually yielded.
The agent seemed like a good guy. Surely, he knew what he was doing.
To make a long story short, my application for disability insurance was denied because I have an essential tremor. If only I had known what I needed to know about disability insurance.
It didn’t seem like a big deal at the time until I got to residency. That’s when I found out about the “guaranteed” policy that many of the residency programs offer. No medical exam. No medical history taking. It sounded perfect.
As it turned out, the only stipulation that prevented someone from getting the guaranteed policy was if they had been previously denied disability insurance. And I had. As a third year medical student (who had no business applying for DI).
This was my first taste of the conflicted nature of the financial industry.
3) Financial Fraud
Not twelve months after my disability insurance debacle, I had another negative experience with the financial industry.
This all occurred during what is called our “Intern Boot Camp” where they teach the 4th year med students what they need to know to be successful in residency. As part of this, my medical school brought in a financial advisory firm that focused on student loan management and financial advice.
Even when I knew nothing about money, it felt suspect to me. I couldn’t quite put my finger on why it felt that way, though.
They offered to provide sound advice that was best suited for soon to be physicians. You could even put your name down for them to contact you later for the opportunity to work with them!
Not three years later as a resident, the headlines hit. The CEO of this firm had been charged by the SEC and was later thrown in jail for 9 years for fraud.
My medical school trusted this group enough to come and discuss financial matters with us. And, this is when I learned that if I was going to ever figure this stuff out, I was going to have to do some of my own homework on what the gold-standard of financial advice looks like.
It also created in me my natural distrust for the industry. Now, when I recommend someone in the industry to others, I don’t take it lightly.
4) Insurance Agents Masquerading as Advisors
The advice given was less than stellar.
I was recommended a SEP-IRA over an independent 401K for side income (despite mentioning that I was doing a backdoor Roth IRA each year), a steep Assets Under Management model was pitched at me, and I was advised to buy whole life insurance.
That’s when I realized that finding good financial advice was harder than it seemed.
If I threw a rock, I could probably hit a financial advisor targeting physicians. But I soon realized that finding a good advisor is a challenge. Getting financial advice without doing your homework seemed to be a sure-fire way to get fleeced.
These three experiences really shaped my view of the industry, and they are what led to the strict criteria that will likely limit the length of my list of recommended advisors.
5) The Need
I was very mistrusting of the financial industry, for obvious reasons. After all, they created this beast. Just like they created the White Coat Investor (this is the third post ever from WCI).
Following the above situations, I decided that if I ever had time to learn about personal finance, I was going to do it on my own.
Suddenly, I was a financial independence zealot (or was I a member of a personal finance cult?).
Most of the people I talked to knew next to nothing about personal finance. My residents didn’t know basic student loan management techniques. And most attending physicians I talked to made the same classic doctor mistakes that most of us make.
On top of all of this, I started learning more about the burnout epidemic that is rampant in medicine. Doctors (and other health care professionals) felt trapped. They felt like there was no way out of their situation.
No one taught people about the freedom provided by financial independence, and how this can prevent and treat burnout.
I decided that I wanted to reach as many people as possible and provide hope on the road to burnout by teaching financial independence and personal finance topics to anyone who would listen.
The Physician Philosopher Blog
The above experiences shaped my hatred for debt (which allowed me to pay off $200,000 of student loans in 19 months), my innate distrust of the financial industry, and my fierce desire to protect those in training from those who would lead them astray.
It also created in me a drive to guide others in how to avoid sabotaging themselves. You have worked hard to get to where you are. Many times we are our own worst enemy.
Combining these motivations, the burnout epidemic, and the huge need that clearly existed, I created The Physician Philosopher blog in November of 2017. It remained anonymous until February 2019. Finally, I revealed my identity with the publication of The Physician Philosopher’s Guide to Personal Finance (which maintains a 5-star rating on Amazon, you should check it out).here is an example), I eventually found my voice, and started writing about how doctors and other high-income earners could use money to treat and prevent burnout (instead of making bad financial decisions that often make burnout worse).
While my memory is etched with the pain of losing friends caused by going through bankruptcy as a kid, there is a silver lining. All of these financial mishaps molded me into a driven and passionate teacher who is bent on guiding others to be the heroine/hero of their own financial independence story.
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What gives you the motivation to get educated on finances? Have you achieved FI after serious financial setbacks? Share your story and comment below!