Recent portfolio gains and a dramatic increase in this blog's readership as of late combined with many discussions with financially independent people have caused me to reflect much more lately about how I live my life. I'm not financially independent yet, but it's becoming more and more clear that my plan to become so is going to work just fine. Combining a nice, but reasonable, lifestyle with a high savings rate and a well-thought-out investing plan is clearly a path to success. So lately, I've been thinking about how my life would change if I were financially independent RIGHT NOW.
Quit Your Job?
I was talking to a partner and asked him what he would do if he had enough money to support himself the rest of his life. He said he's quit right now. He felt he had plenty of hobbies he enjoyed and could live just fine without practicing medicine at all. I've also got plenty to do, including this blog, but I'm still not sure I'd quit my job all together.
Work On Your Terms?
I spent a lot of time and effort to become a doctor. I love the ongoing learning and the “people watching” aspect of medicine. People are absolutely fascinating and I find it interesting to see how they tick, both physically and mentally. I also love the occasional opportunity to save a life and fix a problem and the frequent opportunities to relieve pain and reassure someone that their potentially serious symptoms don't actually come from any type of serious problem. I'd be lying, however, if I said there was nothing about my job that I dislike. I don't like dealing with drug-seekers, trying to convince unreasonable people to be reasonable, or caring for people who feel they're entitled to my care for free (although I actually like caring for grateful people for free). I also dislike the constant liability from errors I could make, which drives a lot of financially independent doctors out of medicine. While medicine is still enjoyable to them, it isn't worth the risk of them going from being financially independent to not being financially independent. Personally, I would at least quit working the overnight shifts and I would probably cut back on the number of shifts I work if I didn't need the money.
What Do You Really Want To Accomplish?
Most people, including Americans, will never have the opportunity to do whatever they want without considering the financial ramifications. It is really quite a gift to have 40+ years of your life to put to a productive use, and one that I would feel at least a little bit guilty squandering. Medicine is certainly a worthy goal, but so is volunteer work, generating a financial legacy for your descendants, raising a family, politics, or even a second career. There are lots of options out there.
Fake It Til You Make It
The more I've thought about this, the more I think perhaps I shouldn't delay my desired lifestyle for the date that I hit financial independence. So as much as possible, I've been trying to use my time in the exact same way I would if I had $5 Million in the bank. For now, I'm still working those pesky night shifts, but otherwise I'm trying to do exactly what I would do if I could retire tomorrow.
How would your life change today if you were financially independent? What kind of a legacy would you like to leave? Comment below!
I’ve always said that retirement = not having to work for money, but does not = cessation of work necessarily. I think anyone who hits his/her retirement balance goal should consider him/herself retired, and do exactly what you describe above. I would personally continue working, but would cut out anything painful from the routine.
We in medicine spend more time preparing to do our primary job than just about anyone else (kind of like Olympic athletes.) It must be hard to just put something like that down completely, after literally devoting your life to it for a decade or more.
I am somewhat concerned that $5M might not do it for us, given a conservative prediction of future returns, and the assumption of worsening tax picture nationally.
I echo your sentiment on the cessation of night shifts- I am on one now, and wouldn’t be if I had the choice.
I like my job. I don’t think I could just up and quit at this young of an age (34) but I would scale it back. I’ve always been interested in politics so I would consider running for office. I love teaching so I might convert my practice to teaching site perhaps…
I also like to tinker. My wife once asked me what I would do if I had enough money to live on for the rest of my life but I couldn’t do medicine.
My Answer: Travel a lot more and make Bourbon. I would love to start a small batch distillery. Even got a name picked out…
just curious, what is the name?
Two types:
Roanoke Rye (80 proof rye bourbon). Roanoke, TX is where I live.
Bad Decision (100 proof corn bourbon).
Also thought about a lighter, sweeter style bourbon called “Little White Lie”
interesting post.
I have an idea of what i’d do if i was financially independence, but i’ve always wondered if my ideas were short term.
There’s tons i want to read, tons of video games i’d love to get into, lots more exercise i’d like to do, and lots of travelling i’d like to do.. and I like the Bourbon idea also!
But would that last for more than 1-2 years off?
I think i’d just feel alienated from society if i somehow got gifted like 5 mil and could completely walk away.
Agreed, interesting post as I’m approaching 40. It is interesting looking around and seeing union plumbers, firefighters, policemen the same age who are retiring.
Not a MD but an engineer. If we were financially independent I’d probably devote some time to teaching engineering or inspiring kids toward a career in engineering. There’s been a tremendous brain drain due to outsourcing overseas and the lucrative pull from careers like investment banking in the last few decades. I worry about this country’s future as innovation and manufacturing stagnates.
Other than that, we wouldn’t change anything about our spending habits which aren’t that extravagant anyway. I’d visit my relatives more often, travel, find a new hobby, and spend more time outdoors with my kids.
I might buy myself a pair of Jimmy Choo’s just for yucks.
Great post – and a topic I suspect every physician has considered, especially on the night shifts, or on call. While I may have enough socked away, and am old enough to retire, I don’t want to. I did a bit of a ‘forced retirement’ after getting dinged by a former employer – it irritated the heck out of me! I still have kids in school; I still really enjoy practicing medicine, though the BS demands of hospitals and insurance companies conspire to suck the joy out of it. My intent is to continue practicing until I don’t want to anymore. And my ‘new practice’ (can’t believe I’m doing that!) is clinic only, my hours driven by what I want to do, and what I want to make. Luckily I’m in FM, where the income incentive no longer exists. I appreciate all the help I can get in my quest to be a caring, ‘not doing it for the money’ MD.
AFA hobbies – you folks have the right idea. I’m brewing beer with my Son in law; our names aren’t as catchy as yours, for the hard stuff. One of the things I enjoy about the craft beer hobby is the inventive names. Some folks have it figured out!
The travel idea sounds great, and I’d encourage all to do a bit every year – delayed gratification is over-rated, and easily converts to non-gratification. If you do it right, your taxes will pay for it, as well.
Thanks for a great topic!
My first craft beer was made after I came home from Afghanistan. It was a honey English brown. I read “little nut brown hare” to my 1 year old almost ever night. Naturally I called in “Honey Nut Brown Hare Ale”…even made a cute little bunny label…
Obviously people have different needs, but $5 Million even with “conservative” estimates ought to support a very reasonable post tax income of around $12000 a month…thatmis just money to spend. No disability insurance, probably no more need for life insurance. No set asides for retirement savings. And you have a very high likelihood of ending up with more than $5 million when you are done. As Michael Kitces pointed out a blog post last year: “the worst safe withdrawal rates in history that we rely upon are actually associated with 15-year real returns of less than 1%/year from a balanced portfolio!” and that was in support of 4.5% SWR or $225,000 a year per tax withdrawal adjusted up for inflation every year.
And if structured properly I have a hard time envisioning any way post retirement taxes are anything close to what I pay now. If most of your dough is coming from tax deferred accounts, sure then you are going to pay higher taxes, but most of taxable account savings are going to be taxed at 0% to 15% Federal.
I wouldn’t quit work completely, but would scale down. I would travel some more. I could consider building a kit plane and I would train a SAR dog. Having both a plane and no need to work I would be free to travel as needed to areas doing SAR work.
How can I become financially independent?
I’m 18 years old, and I’m going to be living in a dorm at college. So far my parents will be paying for everything pretty much. For sophomore year, I would like to move in to an apartment. I have a job, but I only work part time and its not nearly enough money to pay rent. What steps can I take to become financially independent?
Business Taxation Services? Spam is really getting more sophisticated. Your posted name is for firm in Wales, yet your online marketing firm seems to be located in Charlottesville. Yet you are a freshman in college and work part-time. You want to become financially independent? Why don’t we start with being honest. Then, Stella, I’d work on building your business. Then I’d probably quit spamming people’s blogs. Real people have to sift through the crap you’re spamming across the internet. I’ve sent you an email asking you to stop spamming my blog.
Hi, I’m not a doctor but an engineer also. I went through a period of pretending to retire early at 35 and based on a one year experience of being on a sabbatical, I decided to quit my secure government salary job. It took a year before I realized I hated being alone. I couldn’t stand the loneliness, so I decided to pick up consulting work and start contributing again, and pursuing interest based work, including volunteering on a regular basis, writing a blog to help others invest in real estate and reconnecting with family.
I recommend anyone else thinking of retiring early, to try it out for a year or two as a beta test to see if it is what you imagined it would be before going ahead full force. I decided I wanted to work again but on my own terms:). Hope that helps.