How to Retire Early as a Doctor with the Physician on Fire – Podcast #130

Intro: This is the White Coat Investor Podcast, where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors, and other high income professionals, stop doing dumb things with their money since 2011. Here is your host, Dr. Jim Dahle.

Jim Dahle: Welcome to White Coat Investor Podcast number 130, Retired from Medicine at 43. Have you ever dreamed of retiring from medicine in your 40s? Today we're going to talk to a doc who actually did it recently, and find out how it's going.

Jim Dahle: First a word from our sponsors, SoFi. Hundreds of white coat investor readers have refinanced with SoFi over the years; for two reasons. One, they make it really easy with their great tech solution online that you can find out your rates very quickly and get through the process with a minimum of pain. Two, they give great rates. People compare them to a lot of their competitors, and they end up going with SoFi because SoFi so often is the lowest rate out there. But if you apply via the links on the White Coat Investor's site, we'll put them into the show notes, not only will you get paid if you close the loan, $300 cash, but you will get a lower interest rate and you will help support the White Coat Investor's site.

Jim Dahle: Now the lower interest rate is probably the greater benefit, because you are going to save thousands on your student loan interest; even if you're doing what I recommend and you pay them off over two to five years. But the $300 cash is nice, too. I hope you'll just put it toward the balance of your loan, but if you really want you can use it to go down and buy a Frosty at Wendy's every day for the next 10 months. SoFi really doesn't care. They're going to give you the money and you can use it for whatever you like. They also have a fantastic medical and dental resident program, the $100 monthly payments. If you're worried that you can't refinance your loans because you'll end up with a huge payment, SoFi has a program to help you during your residency, that you still get those low payments just like you would get in an income-driven repayment program. In fact, probably lower for many docs, but still save money on the interest that's accumulating. So you can get a refinanced loan with SoFi at whitecoatinvestor.com/SoFi. That's S-O-F-I.

Jim Dahle: They also have four other great products that we talk about from time to time here at the White Coat Investor. One of which is a SoFi money account. This is a cash management account. I've actually got one of these accounts, and it's fantastic, have what essentially functions similar to a checking account but pays you an interest rate of almost 2%. Hard to complain about that, right? I have it, I like it. It doesn't do absolutely everything that my bank account will do, but for nearly 2% interest I'm willing to deal with some of that.

Jim Dahle: They also have personal loans. I occasionally get an email from a doc who is looking for a personal loan for whatever reason. I usually try to talk them out of borrowing any more money, but occasionally honestly they have a good reason to do it. You can get these often for less than 10%, just a signature personal loan from SoFi. So we'll put that link in the show notes, as well.

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Jim Dahle: They also offer a mortgage product. You have to put 10% down, but no PMI is required. So a lot of readers, particularly those in California, have found that to be a useful product for them. We'll put all those links in the show notes, but encourage you to partner with our partner, SoFi, in saving yourself some money and getting yourself ahead financially. Again, that url is whitecoatinvestor.com/SoFi.

Jim Dahle: All right. Our quote of the day today comes from J.L. Collins, who said, “Yes. It is possible for every middle-class wage earner to retire a millionaire, though it's never going to happen. That's not because the numbers don't work.” I love that quote because it demonstrates the importance of behavior, even for those that don't have the high income like you do. But the truth is with your high income, you have no excuse whatsoever to not become a millionaire.

Jim Dahle: If you're not familiar with the White Coat Investor website, because you're just a podcast listener, I would recommend you spend a few minutes there in the next few days just to see what we have available; particularly under our Recommended tab. A lot of people are looking for help with various services, and we have gone out and vetted some companies and found some partners that offer great services that are continually being revetted by our readers and listeners, by using their services and letting us know how they're treated. These guys like being listed on the White Coat Investor, so they try to give you top-notch service when you go through them.

Jim Dahle: But if you need some legal services, we've set up a new legal service page. Now, what do I mean by legal services? Well, it might be contract review, it might be if you've been the victim of fraud with your investments, we've got somebody there that can help you with that as well. We're always adding new people there, a few people that do estate planning and that sort of thing, as well. If you need other services such as practice loans, we've got a page for that. If you need someone to help with your taxes, either preparation or just coming up with a good tax strategy, we have people that are available for that. All of that is under the Recommended tab at whitecoatinvestor.com.

Jim Dahle: All right. We probably ought to get our guest today, the Physician on FIRE on the line here, and get going with this podcast because you guys have sent in 13 pages of questions you want me to ask him. We're obviously not going to get through all of those, but we'll do as much as we can and give you a sampling of what this will be like, if you retire early.

Jim Dahle: All right. I have our guest on now. The Physician on FIRE, Leif Dahleen. Beer aficionado, also an anesthesiologist, and a highly respected member of the FI community, and the FIRE community. That's financially independent retire early. Who has been a very prominent blogger in the physician financial space the last three or four years. I hope he needs no introduction to you, but if so, here is Leif Dahleen the Physician on FIRE. Welcome to the White Coat Investor Podcast.
Leif Dahleen: Thank you, Jim. Thank you for that wonderful introduction. I just want to say thank you to all of the physicians out there who are listening. I want to thank you for the work that you do because it is a difficult job, often thankless job, and not everyone appreciates the work that you do. But Jim and I do, and so do many of your patients, even if they don't tell you.

Jim Dahle: It was interesting, I just read an article before recording these podcasts and I mentioned this on the podcast that I did for last week. But I just read an article from Pamela Wible calling medicine, the culture of medicine, essentially a human rights violation; which I thought was maybe a little bit extreme to call it that. We certainly have some issues with burnout and physician suicide. I'm not sure it's quite yet reached the level of human rights violation. Did you see that article?

Leif Dahleen: I did not. I've seen similar language from her and others, and it is strong language. When you compare that to what is going on in Syria with chemical gas attacks, it's maybe a bit over the top for my taste. There certainly is an issue with the way that physicians are treated, and sometimes treat each other. It would be great if we could all improve the way that we are taking care of ourselves and treating one another.

Jim Dahle: Yeah. I posted it on Twitter, and somebody said something to the effect that, “Just running away from medicine isn't the solution.” I agreed with that. We've got some problems in the house of medicine that need to be fixed, but it's amazing to me how many doctors don't realize that running away is an option.
Leif Dahleen: Right.

Jim Dahle: If you take care of your finances, you get your student loans paid off, punching out of medicine and going and doing something else is an option. We're not in a concentration camp here. We're not stuck. We have options. The only reason people feel like they don't have options is usually because of poor financial choices.

Leif Dahleen: Right. When you can afford to do what you want to do, you can step away if you want to. Having the time to actually focus on other things, which can actually be focusing on the injustices that we feel we are facing daily. I haven't chosen to do that with my time, but it's really difficult to fight the systemic problems of what are causing burnout when you are working 60+ hours a week. Maybe you can cut back to half time, and devote the other half of your time to actually addressing those issues.
Jim Dahle: Yeah. What I tell people is, “First cut back to full time.”

Leif Dahleen: Right. Yeah.

Jim Dahle: It's amazing how many docs are like, “Man, I'm feeling burned out.” Well, you're working a job and a half.
Leif Dahleen: Yeah. Mm-hmm (affirmative).

Jim Dahle: No wonder you're feeling burned out. So, anyway. I got 13 pages of questions here-
Leif Dahleen: I don't have 13 hours of time, so be picky.

Jim Dahle: … from your fans, who want their questions answered. I think we probably ought to start with a general overview. You've been blogging now for how long?
Leif Dahleen: I started in January of 2016, so it's been a little over three and a half years.

Jim Dahle: So three and a half years you've been blogging about financial independence and retiring early. You were essentially financially independent before you ever learned the term financially independent. So this whole time, this last three and a half years that you've been blogging, you were already financially independent and yet still continuing to work as a physician. Yet recently, you decided, “I'm done. I'm not going to practice medicine anymore.” What's different than three and a half years ago?

Leif Dahleen: Well, I do have more time. What you said is true; I discovered the whole FI movement, and the fact that we had this financial independence, by virtue of having at least 25 times what we were spending in a normal year, back in late 2014. It was about a year of actually learning more, reading about it, and then discovering your blog and Mr. Money Mustache and a handful of others, that made me decide to start writing about it, to share how incredible I think that this is that you can get to this state.

Leif Dahleen: What's different now is that I don't have the anesthesia job, and that ended, well as of this recording, six or seven weeks ago in mid-August. That gives us the freedom, as a family, to travel extensively; which is something we've wanted to do for a long time, but have never had the location independence to be able to do so. So about a week from this recording, and I'm sure by the time this is released, we'll be there, but we're heading off to Ecuador for a two-month adventure. We'll be back in the States to celebrate Christmas and the holidays with family, and then off to Spain for a couple more months. When that wraps up, we'll be seeing you again in March in Las Vegas for the White Coat Investor Financial Literacy and Physician Wellness Conference out there in March of 2020.

Jim Dahle: Yeah, we're looking forward to that. It's going to be a great conference. So it's been six or seven weeks, and what do you think? Did you make a mistake? Are you still enjoying it? What have you been doing?

Leif Dahleen: I've been doing a lot. If people read your newsletter that came out recently, it said that you underwent the purge of moving out of your home, to have it remodeled. We moved out of our home in May and June, sold our home, and now are moving into a home in Michigan. So it's about a 600 mile distance, and we don't have a hospital paying for the move like we had when we moved to Minnesota. So I've been busy moving. I've been back and forth quite a bit. We had some different obligations with family and friends back in Minnesota, and for the last, like I said, six or seven weeks I've been on the move. I've been doing the purge, getting rid of things that we just don't need in this newer, smaller house. And went to Washington DC for a week with the family. I've been having a good time, but I haven't say I've been bored. I know there were questions on, “Are you bored yet?” Gosh, no. I haven't even caught my breath.

Jim Dahle: Yeah. It doesn't sound like you settled into any sort of stable pattern whatsoever.
Leif Dahleen: No.

Jim Dahle: A lot of people asked, “What does he fill his time up with?” I'm not sure you can really answer that question yet, because it's different every day.
Leif Dahleen: It is. It certainly is. But we have had a bit of downtime, and time to do things that I just wasn't able to do before with a job; a good example is this morning at 9:00 am the four of us ran this 5K loop that we discovered in our new neighborhood. We've done that four times in the last week. We can do that at any time of day, because our kids are now homeschooled and I am now without a regular job.

Jim Dahle: Yeah, that's pretty exciting. All right. Let's take a question, this one came off Twitter, from Claudia. Who asked, “How did you avoid one more year syndrome?” Why don't you explain what that is first to the listeners who may not be familiar with it. Then talk about how you avoided it.

Leif Dahleen: Sure. So working one more year, basically after you realize, “Oh. I have financial independence and I don't need to work, but if I did, well, then I could spend this much more annually. I could maybe save up, maybe remodel my house,” like you are doing Jim. The fact is, I didn't avoid it. I worked almost five more years after I realized that I didn't necessarily need to. That was because… Well, at the time I discovered financial independence, I wasn't emotionally ready to think about not having this job. It really took several years of contemplating, reading, writing, talking with friends and family, and making the somewhat permanent decision to walk away.

Leif Dahleen: Now, it's not permanent yet because I still have a license. I will do the minimum CME and maintenance of certification that I need to do to be able to go back within the next year or two. But if I don't practice medicine in the next couple years, then it's probably a permanent decision. So I wanted to have a really large cushion, and rather than having that 25x expected spending each year, which would give you a 4% safe withdrawal rate, which is pretty good, I worked until we had more like 40 to 50 times what we normally spend saved up. So I feel very confident no matter what happens in the markets here coming up that we'll be in good shape going forward.

Jim Dahle: Now I've got another question here from Michael Iverson. “Do you miss going to work?” Now, he's not talking about the 3:00 am epidurals, because we all hate those. Just the normal, ordinary days. Do you miss it whatsoever?

Leif Dahleen: I do miss some of the people, including the people I work with, and the patients. But as far as the run-of-the-mill workday, I can't say that I miss it.
Jim Dahle: It's interesting, because you always said that you liked going to work. You liked your job. You just liked your days off more.
Leif Dahleen: Yeah. I think a lot of people feel that way, when you really think about, “Well, you can do whatever you want with your day, or you can go do your job.” Some people, absolutely; they'd rather be there taking care of patients. That's kind of what they feel like they were born to do, and it's a calling. To me, it was a good job. It was a really good job, but it was a job that I worked to make money.

Jim Dahle: All right. Now we've got a series of related questions here. A couple of these are coming from Mathias Alban and then also one from Joshua, that are tied into this side gig you have, this blogging. It has become quite successful, not only in the amount of people you can reach, but also in the amount of money it makes. Mathias asks, “If you didn't have your side gig, with the same amount of money, would you still have retired early? What would you be doing?” And, “How has having a successful side gig affected your ability to retire well, and successfully?” And then Joshua asks, “Well, how much does he earn from his website?” If you feel comfortable sharing that, you can do that as well.
Leif Dahleen: Yeah. Those are great questions. It's kind of asking me to see myself in an alternate universe that doesn't exist, where I don't have this blog. But when I did discover we were FI, and kind of came up with about a five year plan at that point, I knew that we would be really in good shape with or without any kind of blog income. So I would say, yes. I believe I still would have retired around the same time. I was looking at maybe 2020. So I think it's maybe not the income that the blog has provided, but the amount of time that it takes up, that maybe prompted me to retire maybe a year earlier than I might have otherwise.

Leif Dahleen: As far as the income, I do share that with my newsletter subscribers. I'm due to put out a quarterly post any day now, maybe a few days overdue, but I will do that. I'll give you a rough idea. It's interesting, because for every dollar of revenue, I pay my shareholders, which are of course you and our mutual business manager Cindy, and a little bit of the income. I cover expenses, and then what's left I donate half, and then I pay taxes on what's left of my half. So I end up with about 25 cents in my pocket for every dollar the site brings in. That being said, we are looking at donating a six-figure sum of money this year. So we are actually earning multiple six-figures, which is pretty wild and amazing. I don't think that would have happened if I hadn't partnered up with you and the White Coat Investor, and been part of our network that we're building.

Jim Dahle: Well, as I wrote years ago when we joined up, it's been a win-win-win for everybody; readers, my listeners, you, me, our families, et cetera. So certainly been a wonderful partnership so far.
Leif Dahleen: I agree.
Jim Dahle: All right. Let's move on to another question. This one I like. This one comes from Louis. He asks, “Now that you're retired and have time to reflect, if you could go back and change anything about your path to FIRE, what would it be?” For example, would you have gone part time sooner, for increased happiness, or cared less about spending and traveled more? What would you have changed, now in retrospect?

Leif Dahleen: Yeah. I retired a lot earlier than I ever would have thought I might, when I started a family and realized that my youngest would be leaving the house when I was in my early to mid 50s. I looked at that as the time where maybe we would start to travel more, maybe do some locums work, and phase into retirement by about maybe 53 to 55.
Leif Dahleen: So I cut a decade off of that with the plan we ended up pursuing, but I would probably have looked for a job with fewer call obligations sooner. There was an inflection point where the first “permanent” job that I had; was doing poorly financially, and there was talk about maybe switching over to a surgery center model, and no call, and maybe doing four 10-hour days, and something like that. I was all for it. I said, “Yeah. You can pay me, whatever, 25% less, 30% less. I'll take no call. I'll work 40 hours a week. That sounds fantastic.” That didn't happen. The place shut down completely and went bankrupt, and we moved on. But now that I know that we would be in a position to retire by age 40, I might've looked to have a little better life and worked a little bit less by looking for a surgery center-type situation that had no call, no nights, no weekends, no holidays. That would have been a job that would be more sustainable, and I might've been happier doing that longer.

Jim Dahle: But you haven't transitioned to a job that does like now. Instead, you've gotten out completely. So it must not have been all there was to it.
Leif Dahleen: No, that's not it. I did work half, a little more than half time, for the last about two years. The only reason I didn't look for another job like that, it would've required us to move to someplace that had that job, and my wife was ready to move back close to family. They live in a place where it's just really pretty sparsely populated, and I would not have been able to find a job like that around here.
Jim Dahle: Well, let's talk for a minute about your plan. You kind of eluded to it, and I think people that have been in the FI community for awhile understand what the plan is for most people that become financially independent at such a young age. But for a lot of my listeners, this might be the first financially independent physician they've ever really heard about retiring in their 40s. Can you describe what the plan was? From the time you got into, or the time you left, residency until the day… What you did, how did you become financially independent and retire early?

Leif Dahleen: Good question. I didn't know what I was saving for. I didn't try to become financially independent, or shoot for early retirement. I was just living my life, and spending as we thought appropriate. I think my wife and I were fairly frugal by nature, and so we lived a little better than middle class. Our spending now, we're looking at about $80,000 a year. We have paid-off homes, and the biggest expense will probably be health insurance and then of course food and travel. Travel might be the biggest expense, depending on how you categorize the things you do when you travel. We really just did it by living on maybe $80,000 to $100,000 a year, and setting aside double that some years, and making a good income. One income, but one good income. Before we knew it, the stock market had been very kind to us, and we were in a position where we didn't have to work anymore.

Jim Dahle: What do you think was your average savings rate? From the time you left residency until you retired this year?
Leif Dahleen: I would say average was probably 50 to 60% of net, so after taxes. Maybe 35 to 45% of gross, if I had to guess. I didn't much attention to it the first few years. I worked nothing but locums the first couple years out of residency, and so our expenses were nill. The agencies paid for our lodging, they gave me a rental car, some of them gave me a per diem for food. So our out-of-pocket expenses were minimal. Just vacations, pretty much. Then we put quite a lot of money into a house, and that probably cost me a year, to be honest. But the last five years or so, when I was working full time, I know we were setting aside $200,000+ between 401K, 457(b), HSA, and then mostly taxable investments at $10 or $15,000 a month.
Jim Dahle: So you're obviously earning a lot, you're saving a ton. You mentioned your spending is about $80,000 a year. Let's talk about some of those categories you eluded to. What are you doing for health insurance now?

Leif Dahleen: We considered healthcare sharing ministries, and I know you've highlighted those with some people who are using them in your practice. We looked at that. We looked at short-term catastrophic plans; there wasn't much. We found that would work best for our family, was simply a plan off of the exchange, healthcare.gov, that is a Bronze HSA plan with a very high deductible. We could spend, I think it's $13,200 or $13,500, out of pocket on it. The plan itself costs $909 a month. So about $11,000 a year will be our insurance costs, plus whatever we spend out of pocket. Which, as a fairly healthy family of four, will hopefully be fairly minimal at this point. But even if it's not, and we end up maxing out at that $13,000, the most it could cost us in any given year is about $24,000 to $25,000. So that's reasonable.
Jim Dahle: So you just went out and bought health insurance.
Leif Dahleen: Exactly.

Jim Dahle: There's so many people that ask this question. “How can I retire early? What will I do for health insurance?” You'll buy it, just like the rest of us have for years.
Leif Dahleen: The inflation rate of health insurance has been going up at a faster rate than overall inflation, so it is a bit uncertain, and that's one reason why we did not avoid the one more year syndrome. I kept working one more year to cover any of those unknowns.
Jim Dahle: So is this going to cover you in Ecuador?
Leif Dahleen: No.
Jim Dahle: Have you looked into what you're going to do while you're doing this slow travel all over the place? Whether this health insurance solution is going to work? Did you have buy some sort of special international thing?

Leif Dahleen: I'll be writing a blog post covering some of that, which I will be doing later today. There are some credit cards that give you some really excellent coverage, including evacuation insurance if you were to need to be flown back to the States. There are travel insurances that might cost $1 a day, but they're pretty low. Then in many of the places that we're going to be traveling, Ecuador, Spain, and others, you can actually pay for healthcare at the clinic or at the hospital and it's rather affordable. Yeah. We've got an idea of a plan of what we'll need to do.
Jim Dahle: Now I presume, despite buying this on the exchange, that due to your blog income you're still not going to qualify for any sort of an ACA subsidy. But a lot of people that retired on an income of $80,000 would probably qualify for significant subsidy. Have you ever calculated what that would be without your blog income? How cheap that health insurance would be for you?

Leif Dahleen: I haven't calculated for myself, but I do know other bloggers that they're maybe spending $40,000 to $60,000 per year and their taxable income is much lower than that because they're spending from taxable brokerage account and maybe small capital gains taxes, and they're not paying a whole lot. Their subsidy is covering maybe 50 to 90% of the cost of that insurance.
Jim Dahle: Yeah, that's a pretty good way to pay for it. Just get someone else to pay for it, right?
Leif Dahleen: Yeah. Right.
Jim Dahle: Not sure that was the intention of the law, but when that's the way they write it. That's the way any tax law we have is, is you follow the rules, and you get certain benefits.
Leif Dahleen: Yeah. Just like PSLF.
Jim Dahle: That's right.

Leif Dahleen: Public service loan forgiveness. I don't think they were trying to let a bunch of doctors making $200,000, $300,000 a year not pay back their loans, but that's the rule and that's playing by the rule. People do sometimes really get down on, “Oh. I can't believe this blogger, he's worth $1 million, $2 million dollars, and he's getting a government subsidy.” Well, guess how much that blogger probably paid in taxes? That person paid in taxes to get to the point where they're worth that much money. Hundreds of thousands of dollars already, so I don't think it's a horrible thing for them to collect on a subsidy that the rules allow for. They're really just getting a small portion of their money back that they've already put into the system.
Jim Dahle: All right. So let's turn from healthcare to the travel costs. Kevin of Essex talks about you writing about your travels with your family, and this slow travel that you've been doing, and it sounds like you'll be doing even more of in the future. How do you do that so inexpensively? Can you talk about how you keep your travel expenses down?
Leif Dahleen: Yeah. So to us we're looking at these travels not so much as vacations, but just living in a different location. So the main costs are going to be getting there and having lodging, a roof over your head. I subscribe to an email called Scott's Cheap Flights, and they give us cheap flight alerts. We're going to Ecuador and back for under $400 a person. Now we have to get to Chicago to get that fare, but we've got friends and family that are in the area and so it's not a big deal for us. So that's $1,600 roundtrip to Ecuador.

Leif Dahleen: Then we found flights to Spain out of the little town of Alpena where we live, so the airport is just a few miles away, and those are I believe $640 apiece. So between the two trips to fly the four of us down there, it's something like $4,000 for two major roundtrip flights. That's not a whole ton of money.
Leif Dahleen: Then as far as lodging, we like to have apartments where we have a kitchen and usually three bedrooms and a bathroom. Those on Airbnb usually come at a really significant discount if you stay for either seven days you'll get a weekly discount and that might be 15, 20%. But a monthly discount, which is four weeks minimum, they'll often give you a discount of 50% or more. So I added up our four months of Airbnb costs over the two big trips we're taking this fall and winter, and it came out to about $6,000. $2,400 of that was this four bedroom yacht that's parked at a marina in Barcelona, which looks amazing. So altogether we're at about $10,000 in transportation and lodging. That's not a bad travel budget, and that'll be most of the travel we do for the year.

Leif Dahleen: So you just have to look for discounts, and maybe consider longer term travel because roundtrip flights where you're there for a week, or you're there for two months, or you're there for six months, you're paying the same amount basically. So having the ability to stretch out your vacations can really help.
Jim Dahle: Yeah. I'm pretty amazed. We were looking at what we're going to do for Christmas this year, and it very rapidly became a five-figure amount for a week's trip. It's pretty amazing what you can spend on travel, especially when you're trying to do it quickly and you're paying for convenience. You can really drop the cost a lot when you're willing to deal with a few inconveniences, when you can be more flexible, and especially when you can stay longer and essentially split that cost of airfare over more days of vacation and get those discounts on lodging.
Leif Dahleen: Exactly. Yeah. You're looking at a family of six, we have a family of four, but you're at a five-figure amount, which again, that's what we're spending for four months of travel, is about $10,000. Then, of course, we'll have food and entertainment, but we would have that no matter where we are in the world; whether we're home, or away. So I don't really look at those as travel costs, so much. Although I do expect we'll spend a bit more on entertainment and sightseeing than we would if we were home.
Jim Dahle: Sure. Okay. Lifestyle question. This one comes in from Vidale Belishev , who's asking, “Now that you're with your family 24/7, how do they feel?”

Leif Dahleen: It's going really well. It's good. We've talked a lot about this, and like I said, I did transition into this from working full time to working part time. So they've gotten used to me being around more, but no one has complained yet, which is nice. I've certainly enjoyed it. Like I said, we get to enjoy these family runs at any time of day. Our boys just had their birthdays, we had one on Sunday, and we had one last month. We got to say, “Hey. What do you want to do? The day is yours.” It's been really good.
Jim Dahle: All right. Let's jump into some of the questions from the Facebook groups. Thor asks, “Privacy and security. Does it concern you, and what are your solutions?” I'm not sure if he's referring to your online presence, or just your travel, or what? But can you talk about how you're dealing with privacy and security issues?
Leif Dahleen: Yeah. Privacy hardly seems to exist anymore, unless you're really, really, really careful, and you stay off of Facebook and you stay off of social media. I know when I talked to you about this, I think I asked you a similar question when I was an anonymous blogger and you were not. You said, “Hey. You give me the name of a doc, and within one minute I can have the front door of his house pulled up on Google Maps on the street view.” It's like, “Yeah. Okay. Yeah.” Privacy hardly exists.
Jim Dahle: Certainly the clinic, it's a little bit harder to get the residence, but the clinic is very easy. I can find out where any doc works.

Leif Dahleen: Maybe you need 10 minutes to find their home address, maybe a phone number, the names of their wife and kids. I mean, it's all out there. It is kind of scary, but I'm just coming to accept that we live in a world where privacy is hard to come by. I decided, as you had told me, that it's probably worth putting your name out there and just letting people trust you. It's a little easier to trust someone when there's a name and a face attached to the whole moniker and site.
Jim Dahle: Are you concerned about traveling internationally after writing on the internet that you're a multimillionaire?
Leif Dahleen: Well, in the past, like when we went to Mexico, I didn't say where we were going precisely. There are certain places I would probably stay away from, but again, it's not like I have the traffic of Rumi Setti , or someone. I'm not Tim Ferriss either. I don't think I need a bodyguard. There are maybe a few thousand people that visit my site a day, I doubt many of them are in Ecuador and looking to kidnap someone. I think NFL players, and celebrities, and there are many, many, many more people who should probably be more concerned than a little personal finance blogger like myself.

Jim Dahle: Shane wants some nuts and bolts. So what was your number for financial independence? How did you set that? Did it change? Et cetera.
Leif Dahleen: At the time I added up our spending, and this was 2014, and it was really just based on the credit card statements and the very few checks that we write. I figured we were spending about $70,000 a year, that was after having paid off the mortgage. So 25 times that is 1.75 million. At the time I thought, “Well, I'm not ready to retire, but maybe if we had 40 to 50 times that we'd be good.” We've got that, and a little bit more. So, yeah. We're feeling confident and very blessed with where we're at.
Jim Dahle: Did your number go up?
Leif Dahleen: I say we're going to spend 80 now, so not a whole lot. I mean, at least not the 25x number.
Jim Dahle: How did you keep from… I mean, once you had the means, this is very difficult for docs, it's especially difficult when they transition out of training into their attending income. Their spending goes up dramatically. In your case, you had already dealt with that. You managed to have a high income without spending it all. But as your assets went up, you also resisted the urge to spend more. Something I have not done nearly as well at. I definitely spend more money now than I used to. How did you manage that?

Leif Dahleen: That's a tough one to answer. It's like, “How did you not change? How did you keep doing what you were doing?” Well, I kept doing what I was doing. We did do some things. I built a very large and expensive home, and we ended up losing a lot of money on that. This was in the town where the hospital went bankrupt, so having that experience kind of made me said, “Okay. Well, that was dumb. That was a waste of money.” That was a nightmare to try to sell because without a hospital there were no good jobs in that town, my Cadillac dealer ended up buying it. I feel like I've sampled a lot of the good life. I've stayed in 5-Star hotels, I've had a glass of $200 a bottle wine, or whatever, I've been in nice cars, all these things. That whole law of diminishing returns really, to me, is in place. I don't get a big rise out of the most expensive things in life, and pretty content with the 3 to 4-Star kind of experiences that we tend to go for.
Leif Dahleen: I would say the biggest key is that my wife feels the same way. She doesn't like to waste money. We're not afraid to spend money, but we don't want to waste it. We also don't want to grow up having our kids seeing the best of everything, and expecting to have that throughout their lives, because in eight to 10 years they're going to be off on their own. They're going to be living like college students, and medical students, and residents, if they choose that path, and so on. I don't want them to be spoiled. So we're trying not to spoil them, and that means not spoiling ourselves too much.

Jim Dahle: All right. I've got a few more nuts and bolts questions. These are coming from Blake in Assish , and Joseph, talking about income in retirement, talking about sequence of returns risk. For example, Blake is asking, “What is his income in retirement? Is his withdrawal rate less than what his assets are making?” Well, presumably since you're mostly living off blog income at this point. You're not even touching your assets, are you?
Leif Dahleen: Nope. We are going to start drawing down the 457(b), because it's non-governmental and it's really not my money until it's in my bank account. I'm going to try to get that money out before the tax rates sunset in 2025. So I will be taking that money out. But no, I have not yet really tapped into-
Jim Dahle: Well, you're presumably essentially just reinvesting it in taxable, right?
Leif Dahleen: Yeah. Exactly. Yep. So I'm not the best case study in that regard, because of the blog income. So it's imperfect, but we would be-
Jim Dahle: But you're not going to turn down the income either.

Leif Dahleen: Right. Yeah. No. Again, with that charitable mission, I'm kind of driven to try to continue to increase that number, that income that's coming in.
Jim Dahle: What about early sequence of returns risk? Let's say the market tanks 50% this year, and doesn't come back for a decade. What's your plan?
Leif Dahleen: Well, I think we'd be more inclined to, when we travel, stay in lower cost of living areas. If I had to choose between spending the winter in, let's say, New Zealand where it would be summer, or Thailand where it's always summer. Maybe be more inclined to go to Thailand that year. But not all of our money is in the stock market, we do have about 10% in bonds and about 10% in real estate investments. So a 50% drop in the market wouldn't necessarily mean a 50% drop in our retirement assets, but maybe 35 to 40%. Yeah. But then again, the sequence of returns risk is pretty much taken care of with a withdrawal rate of maybe 2.5%, which is about I think where we're at. So again, we worked those additional years, or I worked those additional years, to account for some terrible returns.
Leif Dahleen: Now, one of the best things you can do, of course, is to develop an income stream that will cover your expenses throughout that period. Then you don't have to worry about it, as long as the stock market bounces back eventually.

Jim Dahle: All right. Let's look now into some of the questions from the Physician on FIRE Facebook group here. I think a lot of these we've already hit. So I want to make sure I'm coming up only with new ones. Yeah. Here's a question. How many years of spending do you have in safe assets? I think they're talking about cash, bonds, etc.
Leif Dahleen: Yeah. Yeah. I don't know if anything is truly 100% safe, but we have about 10% is bonds and cash. And as I mentioned, about 10% in real estate investment. Some of that is lakefront property that we've got listed for sale, and some of that is the crowdfunded real estate investments that we've made. So, yeah. Let's call is 20% in somewhat safe investments.
Jim Dahle: All right. Timothy is asking, “What do you think about the idea of being 100% stock until you reach your financial independence net worth goal, and then selling enough stocks to have three years in short-term bonds?

Leif Dahleen: I think that's one approach. You like to say there are many roads to Dublin. I've had about 10% bond allocation all along, and I guess that made me feel like I was doing the right thing by having a mix of stock and bond. But I believe J.L. Collins, he talks about having 100% stocks, and if you want to smooth the ride with lower volatility you could add bonds. But when you're working and not going to be touching any of that money, I don't think it's a terrible thing to be 100% stocks. It does seem like this may not be a great time to be, with valuations being somewhat high, and we haven't seen a fair market in about 10+ years now. So, yeah. It's your money, you do what you want. I like having 10% bonds. I know you like the Benjamin Graham theory of having at least 25%, and no more than 75%, in bonds. Do what you like.
Jim Dahle: All right. This one from Mark , “What work-related cost are you saving the most on now? What is the most surprising expense you've had associated with retirement?”
Leif Dahleen: That's a good question. We're not that far into retirement that we've had any big surprises. As far as work-related expenses, mine were awfully low. I mean, I don't commute anymore; although, I did that by bicycle half the year anyway. I haven't had to buy a pair of Crocs now in at least a long time. No, there's really not much there that I could say I'm saving money on by not going to work.
Jim Dahle: Okay. Here's a few more questions that are a little bit more philosophical, less nuts and bolts.
Leif Dahleen: Okay.

Jim Dahle: Timothy asks, “How will you deal with the existential dread that is normally covered up by work?” And then a second question from Godam Banshale, who's asking, “What is your goal in life? How will you find value and a deeply fulfilling purpose now that his work is supposedly ending?”
Leif Dahleen: Okay. For the first question, I don't think I was covering up any existential dread by working. I can't say that I'm that deep a thinker. I'm just living my life day by day, and enjoying it.
Leif Dahleen: The second question about purpose and a meaningful life; right now, as I mentioned, we just had a couple birthdays. Our boys are nine and 11 years old. I think our primary purpose is going to be to give them a great experience, and teach them to be confident and kind and just see what the world is like. So I want these 10 years to be very meaningful and memorable for the four of us, and to take preadolescence and turn them into responsible adults. As far as purpose for myself, beyond that, I do have the website Physician on FIRE, and I'm reaching thousands of people, tens of thousands, a month, and helping a lot of them. Compared to what I did in the OR, helping three or four people at a time, by medically directing operating rooms, I feel like I'm having a bigger impact in some ways. I think that's a question with an involving answer, but I feel pretty good about what I'm doing right now.

Jim Dahle: For those who are just tuning in here, we are talking to recently retired anesthesiologist Leif Dahleen, MD, also known as the Physician on FIRE, about his recent retirement and his thoughts on financial independence and early retirement. Our next question comes from Ziad who asks, “Is burnout/moral injury driving early retirement?”
Leif Dahleen: Well, for me, or for everyone? I guess I'll kind of address both. I think I had maybe minor symptoms of burnout. I didn't feel at any point like, “Ah, man. I can't do this anymore.” Just maybe a little bit of that depersonalization, that you start to think of the next patient as the hip fracture or the gallbladder. I think that might be maybe a normal coping mechanism, as part of the job in the OR. But I wouldn't say that I was all that burned out. It was more of just an opportunity that I saw, that I took.
Leif Dahleen: In general, I think that is a driving force behind people showing more interest in financial independence, and retirement from medicine, and moving on, and transitioning to non-clinical work. I do think that burnout, which seems to be increasing in either prevalence or recognition lately, is definitely driving more people towards that.

Jim Dahle: All right. We've got a few people interested in this house transition you've made. One person asked, “How is the $90,000 house?” Delnora is asking, “How is the smaller house working out? Any regrets?” Can you talk about this new house you have, and the move, and what you think about it?
Leif Dahleen: Yeah. So we're both getting new houses, in a way. Yours being remodeled, but you had to move out and purge.
Jim Dahle: I'm going bigger. You're going smaller.
Leif Dahleen: Yeah. Yeah. We went from, our last, well actually our last three homes, were all in the range of 3,600 to 4,000 square feet, including finished basements. So those were big homes. Our current home, and it has been an interesting summer, we thought we were going to move to a lake home that we found and put an offer in, and had accepted. The inspection turned up a number of issues that had us walking away.

Leif Dahleen: We'd already moved out of our old house, our stuff was in storage temporarily, and we kind of had to find something fairly quickly. We found a house in town, not too far from the lakes where we thought we would be, for $90,000 as the one question mentioned. It has a great roof line, it's a mid century home with a gentle slope. We kind of fell in love with the look of it, and looked inside. It was move-in ready, and it didn't cost that much more than building a pole barn on a piece of land. So we're like, “Well, we can do this. We can keep our lake cabin that we already have,” which is a little place, as part of an old resort on a different lake, “and have the two places instead of just moving into one lake place.”
Leif Dahleen: So went from 3,600 square feet to 1,200 square feet in this house. So we did a fair amount of purging beforehand. We walked through the house we were selling with the new owners, before closing, and said, “We're not taking this, we're not taking this, we're not taking this. We'll get rid of whatever you want us to take out, or we can leave it behind.” They actually had us leave a lot of furniture behind. They have two kids about five years younger than ours, and so our dressers and desks and these bulky items actually worked out well for them to keep.

Leif Dahleen: So as far as being in this house, we're not 100% moved in. We still have a fair amount of stuff in the garage, but it's going really well. We like the space. It's almost like apartment living, but with a nice big yard. I can't say I have any regrets.
Jim Dahle: All right. Well, this is the Physican on FIRE. So we've got to talk about beer. A bunch of your followers want to hear about beer. “Does your new retirement affect your beer selections?” John Fox wants to know.
Leif Dahleen: I still like the hoppy stuff. The town we moved to, which is Alpena, Michigan, has a great brewery called Austin Brothers, which is just down a bike path about two miles from our house. We went to the fourth anniversary celebration there just a couple weekends ago. It's funny time that you ask this, because last year my wife and I did a sober October, which is what it sounds like, it's like a normal month for Jim. It's a break for me.
Jim Dahle: It sounds like Lent or something. Isn't Lent earlier in the year?

Leif Dahleen: We've done that for Lent, too. Just to take a break. The summer tends to be a time of higher consumption with boat rides, and campfires, and whatnot. But in general, I haven't home brewed now in awhile too, because we sold our house and we moved and everything has been in storage. I do kind of look forward to next spring, after we settle in from our travels, we do plan to spend spring and summer back up north, and I'll get back into home brewing, filling up the kegerator.
Jim Dahle: Well, I think that you just answered Benjamin Hankle's question, too. He wanted to know how much your beer intake has gone up since you retired?
Leif Dahleen: Yeah. It has gone down.
Jim Dahle: It sounds like it has gone down.
Leif Dahleen: It has gone down, which is okay. It's quite all right.
Jim Dahle: All right. Well, that answers Leo's question as well. You're certainly not brewing beer more now in retirement, maybe eventually, but not right now. He wants to know what your favorite beer you've made is?

Leif Dahleen: I like a double IPA, or a stronger IPA. I made a clone of a beer called Pliny the Elder from Russian River, and it came out really good and very close to the original. I was very happy with that one. Then a home brew club, that I had back in Minnesota, we would buy a barrel, 55 gallon barrel that had been used for whiskey before, and 10 people would brew a five gallon batch and dump it in there. Then after a couple months of aging, we'd pull it out, and get these amazing barrel-aged beers. I know we did an imperial stout, we did an old ale, we did a Belgian quad in there. Those all turned out fantastic. But I can't take all the credit for those, those were group efforts.
Jim Dahle: Awesome. So he also has a little bit of a financial question there, “If you had it all to do over again, would you still pursue alternative investments like the brewery?”
Leif Dahleen: Yes. I don't know how much I can say about that yet, but the one equity deal I have in a brewery, which is owning 4% of a brewery, is going to be sold. From what I've heard, and I do not even know all the numbers, but I think it's going to be a pretty good exit for us. The best part about that was being an owner for eight years, and being able to walk into the brewery and be treated like an owner and get a free beer or two. We're going to miss that one the brewery is sold to another individual, which will be happening here this fall yet.
Jim Dahle: Well, wonderful. It's wonderful to be able to make money doing something you love, right?
Leif Dahleen: Yeah, exactly.

Jim Dahle: All right. So let's turn now to a question from the White Coat Investor forum. This one comes from MPMD, he asks, “Do you have any concern about skill atrophy in such a hands-on field should you eventually want to go back and work a little bit?” I know you eluded to this a little bit at the beginning of the podcast, but how long can you go not working and still be competent to go back?
Leif Dahleen: Yeah. Not that long. So do I have concerns about that? Absolutely. I think that after a year it would be difficult, after two I think it would be very difficult to even get malpractice insurance, from what I've heard. I might even have to look at remedial programs.
Jim Dahle: Not to mention privileges, right?
Leif Dahleen: Right. Skill atrophy, definitely. I even can recall Monday mornings, after being off for a maybe one week vacation, it wasn't so much the skills, but maybe forgetting to check the right box, or dot all the i's and t's on the paperwork. “Oh, yeah. I forgot I'm supposed to sign the orders before I do this and that.” The routine, you start to lose. Actually intubating people and placing epidurals, and peripheral nerve blocks, and all the hands-on stuff we do, I think would be challenging, I think after even a few months. A refresher might be… I shouldn't say refresher, but it might take a few days, to be like, “Okay. Yeah. I'm good. I'm back up to speed.” After two years, no. That's another reason I worked a few more years. I want to make sure we're in great shape here before I let these skills go.

Jim Dahle: All right. This one comes from Lordosis, he's interested in the family dynamics of retiring early, especially with younger children. Can you talk just for a minute about the effects you think this will have on your boys? The fact that you are essentially embracing a slow-travel lifestyle, they're now in homeschool, which I don't believe they were before.
Leif Dahleen: Correct.
Jim Dahle: They're not seeing you go off to work every day. Can you talk about that, and how you think it's going to affect your family?
Leif Dahleen: Yeah. I think it'll be great. I really don't have any qualms there. They are old enough where they will certainly remember the dinners I missed, and the weekends I worked, and the fact that I was never around in the morning before they went off the school, unless I was off work on that day. So, yeah. I think it will be good for them. I think having me around, and having just time with me, will be better than them seeing me leave for work on a regular basis.
Jim Dahle: Okay. Comben, off the forum, has a question for you. Do you still carry malpractice insurance, and if so, who pays for it?
Leif Dahleen: I do not, but the hospital I worked for has tail coverage and anything that would come up would be covered.

Jim Dahle: Okay. He also wants to know, what if your blog stagnates? Your readership and your revenue go down? Are you going to come back to medicine to supplement that lost income? Or what if when your kids grow up and you find your expenses are more than you accounted for, do you have any plans for that?
Leif Dahleen: No. That kind of goes back to the earlier question about, would I have retired with or without this side income, and the answer I think is yes. I would have. No, I'm not relying on this. This is all something I do for fun, and I wouldn't be donating half of the profits if I thought I might need this money in the future anyway. Yeah. Definitely that's not really a consideration. I'm not saying I'd never go back to medicine, but if I did it would have to be in the next couple years, and it wouldn't be for money.
Jim Dahle: All right. Final question here. This ones comes from Dac, on the forum, who's asking about your home interactions since your wife was a stay-at-home mom. “Do you find that the two of you need to specifically plan some additional time apart, beyond your previous social outlets? And have your domestic responsibilities been split any differently now than they were before?

Leif Dahleen: As far as scheduling time apart, we have our own things we do. The other night she went to spend the evening with her aunt and uncle, with the kids, and I stayed home to work on some house projects. Yeah, so I don't think much has changed. I don't think we've had enough time yet, we haven't even settled into the home, or started our first travel experience, to really know how things might look different. I can say that my wife has mowed the lawn every time since we've moved into the house because we got a great lightweight electric push mower and she doesn't mind doing it. I've been busy doing stuff in the garage, and replacing electrical outlets, hung a TV the other day, put a ceiling fan up. I don't know. Stuff like that. We just do what aligns with our skillset, I guess.
Jim Dahle: All right. Where can people learn more about you, and about financial independence and retiring early as a physician?
Leif Dahleen: Oh, sure. My website is a good place, physicianonfire.com. I'm on Twitter @physicianonfire. To reach the website easier, type in pofire.com, which will get you there. Then you mentioned the Physicians on FIRE Facebook group, where a number of these questions came from, thank you for those. We've got about 17,000 verified physicians in that group, talking about personal finance and financial independence, so that's a great place to interact for physicians, and it's only for physicians. So that's a pretty cool thing, too.

Jim Dahle: All right. So now you've got the ear of 25, 30,000 docs and other high income professionals that are listening to this podcast. What is something we haven't talked about that you want them to know?
Leif Dahleen: That's a great question. I just would say that it's never too late to start changing up the way you're living and spending money, to achieve financial independence. It's never too early either. As a medical student, as a resident, don't start living that attending lifestyle. As an attending, it's never too late to start being smarter with your money.

Jim Dahle: I appreciate that. Thank you so much for being on the podcast, Leif. It's always great to have you in the White Coat Investor network, and to get you back on the podcast. So thank you for your time today.
Leif Dahleen: Oh, yeah. It has been a pleasure, Jim. Thank you for the invite.

Jim Dahle: All right. That was great having Leif back on. Physicianonfire.com, if you want to check it out. It's a fantastic resource for any physician interested in financial independence and retiring early, which is probably a great percentage of the people who just listened to that podcast. So be sure to check that out if you haven't yet.
Jim Dahle: Please subscribe to the White Coat Investor podcast, and thank you to those of you who have left us a 5-Star rating. It does help spread this message of financial literacy, almost as much as telling your friends and colleagues and trainees about the podcast. Lots of us have a long commute, and plenty of time to listen to one podcast a week. So thanks to those of you who are sharing the White Coat Investor Podcast with your peers.

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Disclaimer: My Dad, your host, Dr. Dahle, is a practicing emergency physician, blogger, author, and podcaster. He is not a licensed accountant, attorney, or financial advisor. So this podcast is for your entertainment and information only, and should not be considered official personalized financial advice.