[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.
My parents ultimately recovered and live a much more financially stable life. They provided me a great upbringing and are the foundation of my success.
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.
That happened during my fellowship year when I started consuming loads of personal finance books, personal finance blogs, and podcasts. That’s when I discovered the concept of financial independence.
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).
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.
If you need some company along your journey to FI, subscribe to The Physician Philosopher email list here!
What gives you the motivation to get educated on finances? Have you achieved FI after serious financial setbacks? Share your story and comment below!
I enjoyed this post for two reasons:
1. It demonstrates that good can come from mistakes and difficult experiences. A very difficult family economic situation shaped TPP for a future of helping others avoid similar difficulties.
2. It shows TPP’s commitment to improving financial literacy and the financial profession. Informed consumers demand independent advice and a reasonable price. Similar to WCI, I think that TPP will have an important impact in the type of advisors physicians seek to work with (if they choose to), as well as the way that financial advisors do business.
Thank you for sharing your story.
Thanks for the kind words! Sometimes we have to go through the crucible to be forged stronger so that we can help others. That has certainly been a part of my story.
And I agree that many physicians need financial advice, and I want to be a part of teaching them how to find the least conflicted advice at a fair price. I think financial literacy is important for both the future of the individual physician and the future of health care in general.
TPP
I think this is a great example of how things that have harmed you in the past have solidified your future because you took some great teaching points from them. Some people would take the opposite route and never learn from them (and even repeat them) and thus never advance in life.
It is sad that your story plays out again and again with many physicians. I certainly have shared my mistakes in life as well and each one has lit a fire in me that made me want to FIRE even more.
Great job again in making huge positive strides from negative experiences.
Thanks, xray. It’s important for others to know that you can make mistakes and still get to our goals.
It’s also important that people are honest about how they got to their goals. It’s not all peaches and cream. It can be a muddy, dirty affair.
TPP
I too have parents that have made poor choices when it comes to money. Unfortunately they are not in a better spot now than before and I worry that as their highest income child, it’s going to fall on me to make sure they aren’t destitute. It sounds like your parents are better now, but do you have some of the same concerns when it comes to your parents?
I haven’t had that fear at this point, but I have thought about the possibility of that happening.
I can completely understand how that could be a major stress for many, though.
TPP
+1 this.
Parents also do not listen to their kids regarding financial advise. Powdered butt syndrome,
https://www.daveramsey.com/askdave/relationships/11078
Your second point is a bit saddening but I don’t see how the agent could have ever foreseen that your tremor would have been there. Once you finished residency you might have applied for a personal DI policy and it probably would have come up then. .. at which point wouldn’t you be in the same position as now?
My essential tremor was already diagnosed at that point. It was a “known” factor. It was not something that was found in the process of applying.
The Guaranteed DI policy that exists in most training programs does not require a medical exam or medical history taking. While it is more expensive than a personal policy that goes through the exam/history, it allows for those of us who have a medical history to still obtain personal disability insurance.
If the agent I was working with was even halfway decent at his job, he would have known this. Every other decent DI agent I’ve talked to that is an independent agent knows this. Unfortunately, not only did the agent I work with do the wrong things… but he also wasn’t an independent agent and works for the same mutual fund company that many physicians have had terrible experiences with whether it is being sold a whole life insurance policy or getting denied from DI like me.
This would have been easily prevented if I had known the right person to talk to about all of this.
TPP
Hi TPP,
While you suffered some mishaps, you have turned them into assets. I think that is one of the biggest things that distinguishes the winners from the perpetual victims. Better yet, you are leveraging that to help your colleagues.
I should also say that my early posts are way cringeier than yours. I thought the one you linked to was actually pretty good. Looking forward to more.
-LD
Thanks for the encouragement, LD 🙂 We all have our moments, both good and bad! Have to learn from them all.
TPP
Your book is elegant in the way you admit your mistakes, make it personal, and relate some mental models to anesthesiology–such as reserve capacity. You hit on something with this line “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.” I get a lot of that in my financial practice. They know something is not right, but they cannot get to the next step. You have a good podcast voice. You should get that started. But, don’t do too much as we don’t want the TPP to get burned out. I like that you are in academics. Try and get some questions on the MCAT and USMLE regarding forbearance, and the data that the index fund has been shown to outperform active management. Let’s face it, med students and residents will study for the test and we need that on the test. We need to nip this in the bud.
Thanks! I appreciate your encouragement. Those are definitely some reasonable goals to work on (the podcast, changing the medical school environment, etc).
All in due time, my friend. All in due time.
Jimmy / TPP
I’m sorry you had to go through the pain you describe in reaching who you are now but I am glad that you were able to use it to your advantage. Thanks for what you contribute to the WCI mission!
I have a mathematician dad who can’t balance his monthly budget. That helped guide me. But it was the mathematics I got from him that saved us, not his budgeting. For some reason the AUM guy we really liked (mostly because he told great stories) thought that I wouldn’t be thinking “this does not compute!” when he laid out a plan of turning all our money, eg maybe $200K taxable and $200K tax deferred, into $400K with his company, not calculating or putting in the worksheet the $50K we’d lose right off TURNING TAX DEFERRED into.. was it annuities? Naw, I don’t think his product was quite that egregious, but not mentioning that big drain on our holdings was the red flag that saved us from him, and from then on got us commenting to each other “Notice how the finance guy drives a Jag?” “See his pound of gold chains?” any time someone came by the office or invited us out to a free supper. Our marital version of “Where are the customers’ yachts?”