[Editor's Note: We know you visit The White Coat Investor to learn about investment strategies and planning, and we’ve always strived to teach financial literacy to physicians, high earners, and anybody else who finds their way here. But the COVID pandemic has also shined a light on physician burnout and its dangers. That’s why we feel compelled to run articles and columns like this one—to make sure white coat investors stay mentally healthy. We know mental wellness is what leads to a long, fruitful financial life, and we’ll continue to run pieces like this because combatting burnout has become such an important part of everybody’s financial journey.]
By Dr. Joy Eberhardt De Master, WCI Columnist
In 2016, pregnant and parenting, I bought my second home. In 2021, parenting and doctoring, I sold my second home and left my job as a pediatrician. It was time for a change. And I needed to invest in the present.
It stung. My goal had been to net $7,000 a month on my rental with the mortgage paid off. Admittedly that would be several years off. But I was already netting $1,000 a month with the easy goal to pay down the mortgage quickly. I had bought in 2016 when home rates in Portland were more reasonable and had locked in at an interest rate at 3%.
My mortgage was around $300,000. I rented my upstairs for $2,490 per month and my downstairs unit for $1,190 per month—utilities included. (I also had a well-positioned garage that would allow a detached accessory dwelling unit (ADU) per city ordinance. Voila, third rental unit on one piece of property.) I managed it myself. A management company thought I could get more per month and charge utility payback. My profit would increase, and I would work less having someone else manage the rental. I settled into this idea in early 2021.
And then my plan changed.
My family was suffering. Well in reality I was, more than my family. I felt trapped in my job.
It was my life or my rental.
I chose my life.
I sold my rental in August 2021. I made a profit, more than I care to share with you. I quit my job and found a new path—one I could walk for years with my children in hand and my partner by my side.
The reality is I just quit my job earlier this month. I’ve found I have many work opportunities and will likely make more money in the long term.
Yes, in the short term my income has dipped, as I’ve paused.
Yes, I mourn the loss of my rental and my dream of having it net me $7,000 per month.
And yet, now I am not owned, on someone else’s schedule and chained to a system that oppresses me. I can breathe deeply, stretch my arms and legs and be still for movements longer than a pause at a doorknob.
This is what I’ve learned.
#1 You Are Not Owned
I will say that again—you are not owned. The brainwashing that we as physicians are indentured servants starts subtly, early. It’s locked in by residency and fellowship—literally. You make $50,000-$60,000 per year for 3-7 years with the hope of “paying your time” so you can have freedom and the “six figures.” And that freedom never comes. Or often never comes.
The power and control dynamic is amplified during times of family leave for the welcoming of a child into your home. It is solidified with the new biological needs to express milk and attend to the needs of a vulnerable human being (aka child).
But it shouldn’t be like this and doesn’t have to be this way.
#2 Have a Plan
I made a $200,000 salary with $60,000 in benefits. My benefits were generous. My autonomy was not. My hourly rate was $103 per hour. I netted about $10,000 per month after taxes and with my pretax dependent care pay.
(Did you know that this year's pretax dependent care reimbursement increased to $10,500 in 2021, not the usual measly $5,000? Ask your employer. And let’s hope this change can be permanent.)
There are healthcare plan options. One option I have for 18 months is Cobra. Cobra for my health insurance is $2,300 per month, medical only. Dental is another $250 per month. This is for a family of four.
After leaving my salaried job, I net $1,550 for my current basement rental. (Yes, I still have one rental in the basement of my current primary home. I have exclusively bought homes with basements to convert into rental income.)
I can earn $80 per hour to be trained in custody evaluations, and that will only increase. The usual charge is $200-$300 per hour. I have court duties from my prior job and charge $250-$500 per hour. That means for two hours of court prep and two hours of testimony, I make $1,000, at least.
I also make money writing this column for The White Coat Investor.
More so, I have my family.
#3 Find Your Heart
I was 20 years old, volunteering as a Spanish-language interpreter, when I heard a physician say, “Do what gets you excited to get up in the morning.”
For me, that is developmental and behavioral pediatrics. I see kids. I hear kids. I get kids.
And the need is great.
I have a path in place. I have a mentor. I have a new office with a beautiful view of the hills. I have a website and an LLC.
I also see this career change as honoring my own neurodiversity and creating a platform to value neurodiversity in others—parents, kids, physicians, women, breathing human beings. Neurodiversity needs to be celebrated. (But that is a topic for another day.)
Consider signing up for WCICON in February 2022 to find your “heart.”
I see the selling of my rental home as moving assets into my new path. My new life.
Could I have kept my rental and made this shift? Probably. But at what cost? The stress for myself and my family would be significant. My new job would have to pay “now.”
I would not have a needed pause.
There is a cost to every choice we make. What if our goal for FIRE can shift to the now and create gentleness for ourselves and kindness to those around us? And we still make money, still can be financially sound, and still enjoy getting up every morning?
If you’re a physician who’s feeling burned out, The White Coat Investor can help. With our Burnout Proof MD program, we can assist you in getting back to the place, mentally and physically, that will allow you to be at your best and to make sure you continue forward with your financial plan. End the struggle and remember why you wanted to be a doctor with Burnout Proof MD.
Have you felt like you're chained to an oppressive system? Could you envision yourself walking away from a good salary to find your heart and reconnect with your family? Comment below!
Great share…..
Rentals are the greatest thing since any other job creation. Rich Dad – Poor Dad is the best book to read to convince yourself on why Real Estate in the life of a 6 figure earner spewing major cash flow.
WHY: Tax Benefits galore. Free Cash Flow galore. Good Capital Gains also. Learning a New Trade (renting). Slowly knowing how to fix (thru osmosis with contractors). Keeping Physically Active. And, yet, a “strain on time”.
Sure one can do the ‘passive investing’ or ‘private investing’, but if that is your calling, then I would say Crowdsourcing in RE or even REIT (individual) or REIT ETFs are the best over the long term. There are many disruptive Crowdsourcing options out there, and it is best to do it in ‘multiple ones’ instead of all eggs in one basket. When I say multiple ones, do it with 3-4-5 companies, and not 3-4-5 projects within the same entity. There are new ones that do NOT charge a management fee either.
Best to do these investments over the life of our careers, and not to jump into it at once, since there is life beyond investing, making money and making a career! Family, Kids, Raising Good Human Beings, and Teaching them good values < All time consuming activities.
Ken
Not sure I’d call it “free” cash flow.
Anyone who loves Rich Dad, Poor Dad may be disappointed to learn there was no rich dad, but there are still a few lessons that can be gleaned from the book.
https://www.whitecoatinvestor.com/lessons-rich-dad-poor-dad/
I’m not sure how much this comment has much to do with my column. My column is not about rentals. It’s about looking at our life and deciding how to move forward with grace, resilience and courage.
Also what about the Rich Mom? 😉
To all my colleagues out there looking for their next steps!
Right on Dr. DeMaster!!!
Thanks, Dr. Sommers! What would you like me to write about next?
Actually, I believe that Rich Dad is a real person, Keith Cunningham. Successful entrepreneur. I am a real estate investor too and I wouldn’t say it’s “free” either. There’s money upfront. There’s time to find and research, etc. Personally, I love real estate so it doesn’t feel like work to me. I like Peter Kim’s definition of the passive income with real estate. But as this article points out, it’s not for everyone. I love real estate but it’s also a passion for me.
I’d read up on John T. Reid’s criticisms before concluding the Rich Dad was real. Doesn’t really matter except from an integrity standpoint. The book would have worked fine as allegory.
AZRad
Do you create real estate investments in housing that you’d feel comfortable living in? What makes it a passion for you?
I’m not a physician, so my comments are limited. But I am a small landlord. Used to have a a few rentals; now have only one. In many years of land lording, I’ve found that there’s often a new problem to be solved. Some people have the kind of personality where land lording problems don’t faze them. But these unexpected, always-at-a-bad-time issues were a pain for me, even with a property manager to assist. I chronically felt a certain low level of nervousness in the back of my mind about my rentals, even during the times when everything was going great. I’ve concluded that I’m not cut out to be a landlord (at least one who has many properties), and that’s ok. I much prefer a simple target-date style portfolio and one rental. Anyway, best wishes on your continued journey to discover what works best for you and your family.
I didn’t enjoy landlording much either. I have plenty of real estate, but I just provide the money rather than time, effort, or expertise.
I actually love it! There is something special about creating a home for someone. Growing up living in rentals, I focused on creating spaces I would want to live. Renters are people. They are mothers, father, children, sisters and brothers.
Powerful story. You can really hear the anguish that was behind this tough decision. But we are all entitled to “detours” on the path to financial independence. It seems that in this case, this physician’s detour allowed for a much needed respite from her toxic day to day situation. It sounds like she has plenty of options before her, as most open minded physicians do. I wish her the best!
Thanks for the wishes. You should read my other column on the Luxury of Children. And yes, the decision was hard. Frankly, it still is. It is always hard to leave security for the unknown. Yes, I have many options. I also hope for systems to look inward and create inclusive paths. It is hard for women in medicine, especially now.
For me, an OB/gyn, the part of my life that drags on me is the OB part. There’s always a low level of anxiety in my soul regarding who will come into the hospital and if she will have a serious issue. I do OB at two hospitals and one of them only has 1.5 other docs who do OB so I don’t want to leave them covering so much. But as my kids get older I plan to drop OB and get more of myself back so I can give it to them and my wife.
Yes, I encourage you to make the move. We give up a lot for medicine. Sometimes it’s worth it. Other times it’s not. I think if we can have gentleness with ourselves it will create a kinder world. Best to you!
I don’t understand why you felt you had to give up your rental. Seems like financially it was rewarding. Seems like less stress than doing “court duties” especially with a property manager’s help. Did you just need the cash? I wish I could find a rental property like that to purchase.
I sometimes wonder that as well. If I lived in a world where I had more privilege, I might have easily kept it. Coming from a background of limited financial resources and family with disability, it wasn’t as much as an option. Disability is an expense not often discussed.
Is the category really Mental Wellness?
What category do you think it is? I’d love to hear your thoughts.
Time Management
Job Dis/Satisfaction
Work-Life Balance
Income Streams
Rental Property management
Parenting Stress
Establishing Goals/Changing Goals
Working Parents
Neurodiversity
Workplace Challenges
Money Isn’t Everything
I like those ideas. Money isn’t everything. What would you like me to write about in the future?
That was my hope with this piece. I wish you the best. May you find your heart!
And I hope to see you at the WCI conference in February 2022.
I don’t understand. I get job burnout and work life balance. But what did those have to do with the rental units? What problem did selling the rental property solve?
Thanks for your comment, Afan. Selling the rental allowed me to invest in the present – to do less and worry less now. It was a personal choice.
How do you balance investing in the present vs investing in the future? It is not an easy decision.
What would you like me to write about Im the future?
Or you could have just used the property management company like you briefly mentioned ?
Sorry but with the lack of details you’ve provided or maybe the language you are choosing “invest in the present”, this article makes very little sense and lacks substance. How did you invest in the present? Where did the money go? Are you living off the interest of it in a dividend stock ? Or slowly using up the capital ?
No one would ever know from this article or understand why the rental had to go and it’s the very first part of your article and the headline itself.
You seem like you’ve an interesting story to tell, so maybe tell it ?
TC, Thanks for your comment. My column will continue this narrative. Please keep reading. My next one is set to come out April 2022.
I was one of the early ones to comment and you found my comment a bit irrelevant since I took it toward rental management and professional career, and managing both. Many others are having the same trouble.
Respectfully, if you could be clear in your next article to have a goal, strategy to achieve, your tactical steps, and then the potential end-result expected, then it would not confuse the readers. I loved the interaction from many here……
We all want peace, free time, cash flow, low risk, good life and also good family, all in a single package, although all of these are corners of a hexagon! Each corner pull the center points towards it, disturbing the equilibrium.
Ken
Yes, you are right. I wish I could be clearer. The reality is that COVID-19 has been a huge set back for female physicians and the need to prioritize family over money is salient. I would have called my article “to sell my rental and save my family.”
My life referred to the life of my family and what we needed as individuals and also as a unit. It was never to save “myself.” Thanks for the feedback. I look forward to your comments and feedback in the future!
Great post – I applaud your putting your family and mental health first – when often we fixate on the dollar figure and dont look at the final goal – a meaningful satisfying life.
Before you write off getting back into real estate forever, did you ever try virtual assistants to automate a lot of the headache? I’ve got several townhomes and a STR that I manage and find it to be almost zero effort. Most of my SFHs have a lower/comparable return than your 3 unit (1000/net/month for 300k is solid).
I hope you find peace and fulfillment in your new employment and thank you for talking about putting your health and family first .
Thanks for your kind post! I have done STR and know the benefits of automation. I will keep your ideas in mind. Would you be interested in me writing about STRs in the future?
I have found even with automation rentals take a certain amount of energy and create stress that I’m not willing to deal with right now. I am “scaling” back to slow down and “be” more.
This piece is also about the plight of families now. It is a hard time for many families including those from physician households.
Best to you!
Great comments, and yes, even though the article is not about being a professional, property manager, investment manager or recommendations from our financial advisors, it is all about a delicate balancing act for each of our individual personalities around the following major variables:
1. Time Management
2. People Management
3. Money Management
4. Peace/Stress Management
5. Future Money Growth Management
6. Cash Flow Management
7. Debt Management
8. Tax Management
9. Inheritance Management
I am lumping a lot into many of the above variables that might or might not apply to everyone (generalizing on these forums).
All of the above comes down to one thing that my mentor has taught me> Are You Having Fun?
And, even this answer changes from one decade to another for me. So, there is no right and no wrong, since what you might like today to generate peace, becomes stress in the next phase (decade) of life. For me “wealth management” has become my most current stress which I did not have a decade ago even with a Multi-Country-Financial Advisor! A decade ago it was managing the financial equations around kids and funding their deeper needs/goals.
Great discussion and glad it became a bit broader…..
Ken
Yes, you are right, Ken. Peace now for stress later is a real possibility. And yet, we can not change if we keep doing the same thing.
I like the quote “We cannot become what we want to be by remaining what we are.” Max De Pree, business executive, writer
#pediatricsmartbrief #peacenowchangenow #findyourheart