By Dr. Margaret Curtis, WCI Columnist
My family and I have some big changes ahead of us in the coming year. Our second kid is graduating from high school. (If you are wondering how I am doing with the prospect of an empty nest: not well. Not well at all.) My husband spent three weeks in Ukraine in April 2022, and he is now becoming involved with a humanitarian relief project there; he would love to do nothing but international volunteer work, but he doesn’t want to miss any high school hockey games so it will be a few more years.
I will be leaving my job in April, with a mixture of sadness and relief.
No better time, then, to look behind and ahead and to map out our next steps. In the spirit of the new year—and since my editor has promised to run this article on my birthday—I am going to put my thoughts in the form of resolutions. I will revisit them in a year and let you know how I did.
My New Year's Resolutions for 2023
#1 Start a New Venture
I’ve been a W-2 employee my entire career, and I’m starting to think it’s not such a great deal. I’ve got several next steps in various stages of development:
- Start a practice with a colleague: This is already underway. She will do direct primary care, and I will likely carve out a niche for myself, such as medically complex children or mental health. I love primary care, but as anyone who does it will tell you, being a PCP is exhausting. I need a little respite before I get back in the trenches.
- Write a book: This one is not as far along, but I’ve got ideas. “A Pediatrician’s Guide to Poop” is one. “Surviving a Toxic Workplace” is another. I may need to narrow my focus.
- Buy an Airstream and convert it into a mobile vasectomy clinic: This may never make it off the drawing board, but it’s fun to think about. My husband will staff it, and I will be the operations manager. My job will include driving the truck and designing the T-shirts for our swag bag, with mottos like “Cheaper Than College Tuition.”
More information here:
Living Our Lives in a Dual-Physician Income Household
#2 Buy an Investment Property
This one is a darling among finance-minded physicians. Like everyone else reading this, I want to diversify our investments, create passive (actually semi-passive, more on that below) income, and reduce our tax burden. The tax advantages are what first got me interested in real estate investing (REI). My husband and I max out every tax-advantaged account we have access to, and we still have a sizable taxable income—a good problem to have, indeed. Since we are W-2 employees, we don’t have access to some of the tax benefits of being business owners (another reason to start my own venture, see above). That leaves real estate as the next, hopefully best, tax shelter and investment.
There are “boot camps” and training programs that will teach you how to invest in real estate, but my approach has been: read books, listen to podcasts, lurk on online forums, obsess, double-check, overthink. I’ve looked at just about every niche within real estate (mobile home parks, self-storage, single-family, multifamily, short-term) and at active vs. passive. This is what I’ve landed on:
- Active (being a direct property owner) instead of passive (investing in a syndication or equity fund): There is a lot to be said for passive real estate investing (mostly that the income is truly passive), but most passive funds don’t pass along all the tax breaks that you would get with active real estate. Tax breaks are important to us right now, but as we segue into retirement (or when we decide we don’t want to landlord anymore), we will turn the management over to a property management company and/or invest in equity funds.
- Multifamily: Our single-family rental has worked well for us for many years, but multifamily has advantages: the loss of one tenant doesn’t bring your occupancy to zero, economies of scale, and 2-4 units don’t require a commercial loan.
- Long-term: Short-term rentals can be lucrative and can have tax advantages over long-term, but they require more active management. Which brings me to my last resolution:
More information here:
How We Became Accidental Landlords: Turning a Primary Residence into a Rental Property
#3 Rest More
After I leave my job in April, I plan to take some time off. All physician jobs are demanding, and over the past few months, mine has gone deep into burnout territory.
Thankfully, we can afford to have me work less. I’ve got some locums work lined up, but I’m also going to spend time enjoying my family and the beautiful place we live. I’m going to unlearn years of a go-go-go mindset and spend some time every day doing things that aren’t at all productive. I will read a book in the middle of the day. I will hang out with the dog. I will hopefully navigate all these changes with grace and help my kids do the same.
The usual self-improvement goals are in there too: spend less time on my phone, sit up straighter, care less what Wordlebot thinks. Feel free to add your own resolutions, or comment on mine—but first ask yourself, “Is this a comment I should make to someone on her birthday?”
May we all finish 2023 at least as healthy, wealthy, and wise as we started it.
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What are some of your new year's resolutions, financial or otherwise? Are you more focused on building your wealth, or are you trying to prevent burnout? Comment below!
Happy birthday, Margaret!
Congrats to you and your family. It’s great to see yet another physician thinking big and out of the box. I can imagine you will be able to make a significant and joyful impact in a direct care setting when you do decide to put the metaphorical white coat back on after your much deserved respite.
I came to a similar conclusion about how to add real estate to my investment portfolio. It’s been fun so far and has been a nice “gateway drug”, if you will, into being a business owner. You can read a bit about my journey to finally overcoming analysis paralysis on my LinkedIn page, as it sounds like we took a similar path so it may be helpful for you. I’ll try to link to it here but am not sure if that’s allowed. You can also find me on BiggerPockets.
As for resolutions, one of mine this year is to invest real time and money into my physical health. I’ll be working with a trainer/coach for the first time ever. I’m stepping out of my comfort zone to do this, but I know the investment will pay off handsomely.
Best of luck to you and your family!
https://www.linkedin.com/posts/stephen-lewellis-md-phd-faad-11b1a75_realestate-entrepreneurship-notjustadoc-activity-7012519638173433856-6eV7
Hi Stephen – I will check out your post on Linked In, and find you there – would love to talk more and share experiences.
I have been active my entire life, but working out with a personal trainer the past three years has had a HUGE impact on my physical and emotional well-being. I have more literal and metaphorical spring in my step. It really spills over into all areas of life – so, well done and enjoy it!
Awesome to hear that! Good for you for taking the initiative and being intentional about your health.
I very much enjoy MC’s articles. And not just saying that because it’s your birthday. Very well written and engaging.
As someone who is thinking about real estate much the same way you are (just haven’t done quite as much research as you) I would love to see articles about what you’ve learned and how you’re translating that into practice as you search for your first property.
Happy birthday.
Thank you for reading, and for the totally unsolicited birthday wishes 🙂
I would enjoy writing more about the process – maybe those can be some future articles. I made a comment below about some of the resources I found helpful up until now. Cheers to us both as we go!
For a good combination of accessibility and honesty on this topic without too much in your face marketing, check out Dr. Jordan Frey a the Prudent Plastic Surgeon. He invests in cash flowing small multifamily in the Buffalo area. Self manages. I think his wife has REPS. No need to reinvent the wheel.
Agreed, another good resource.
Happy birthday!
Thanks for sharing your experience. I recently left my job and I’m enjoying this break before starting my next one. I call it a self-funded sabbatical. My favorite thing so far has been looking at my calendar and seeing nothing but open space! Biggest challenge: I have yet to reset my circadian rhythm. I’m still trying to figure out how to get a full night’s sleep. Enjoy your break!
GOOD FOR YOU! I hope you enjoy your sabbatical and some well-deserved sleep.
Thank you for your thoughtful article MC. Nicely described and curated.
Was wondering if you could provide your list of reading for the real estate point
Writing down what you mentioned here:
“There are “boot camps” and training programs that will teach you how to invest in real estate, but my approach has been: read books, listen to podcasts, lurk on online forums, obsess, double-check, overthink. I’ve looked at just about every niche within real estate (mobile home parks, self-storage, single-family, multifamily, short-term) and at active vs. passive. ”
That would help all those that can’t jump on the boot camp or training programs
The resources I found most helpful:
1. Dr Cory Fawcett’s book “Real Estate Investing for Busy Professionals”. This book helped me understand how leverage can increase your returns, and breaks down the different metrics to use in evaluating a property. He blogs as “Financial Success MD” and was a speaker at last year’s WCI conference
2. Bigger Pockets: this is the biggest real estate investing website and has a very active forum. I lurked here a lot, especially in the niche forums like mobile home park investing and self-storage. I’m not going to invest in either of those right now – for many reasons, mostly because they are more like running a business than I want to take on – but still a good education. There is also a Bigger Pockets podcast which tends to be very rah-rah, so I found that less helpful
3. Tax Smart Investor Podcast: seriously nerdy. The series on Real Estate Professional Status (REPS) helped me finally understand how it works. I had to relisten to a few sections – having a long commute helped.
I actually spent a lot of time learning about mobile home park investing. For that I used the Mobile Home Park University forum and podcast. Again, not going to buy a mobile home park any time soon but a good education. The Real Wealth Podcast is also good. The same themes come up over and over in real estate investing, so I can still benefit from hearing someone else’s experience even if it seems quite different from mine.
that’s all I can think of – will post more if I come up with any. Get in touch if you want to talk more!
Thank you.
Fun article and great goals – i haven’t written a book but I’ve helped nearly 2000 docs start cash only / direct care practices (all for free) so happy to help with any questions. Cheers
The mobile clinic idea is great. Imagine the free news marketing opportunity if you run a slogan competition for the Tshirts.
OH, and happy birthday!
Cheaper Than College Tuition
No Worries. Mate.
#vaslife
They practically write themselves!
They sure do.
So many ways to invest in real estate I would say avoid active involvement. You stated you want to rest after leaving your job. Let someone else answer the clogged toilet call. I’ve never had a stock (REIT) call me with a leaking roof. Invest smarter, not harder.
Excellent goals. Happy Birthday!
I’m currently thinking about buying a 3 BR, 2BA “manufactured home” (AKA trailer) about seven minutes from the university where two of my daughters will be for the next 3 years.
If I pay their room and board in an apartment at $1200 a month plus utilities, it will cost me about $54,000 for three years.
If I buy the place with cash due to 6-7% mortgage rates, then sell it (or rent it) in 3 years it might work out better.
I figured I would buy it in an LLC and charge the school’s “housing amount” to their 529 plans. I think that is a legal use of the funds, but will ask my accountant.
It is certainly complicated, especially if I rent the third bedroom to one of their classmate friends in terms of leases and legalities.
I just hate the idea of spending $54,000 in rent that is simply gone. I have the cash to buy the place outright and it is earning about 4% right now.
I wonder what you and other folks here think of this idea?
Best wishes on your list!
Probably cleaner if you charge them rent and have the 529 pay it.
The big problem with this idea seems to be that I’m skeptical your daughters want to live in a trailer 7 minutes from the university while going to college.
And if you wouldn’t buy it if they weren’t going to college there, why do you think it’s a good investment just because they are?
I decided against it.
Closing costs in, closing costs out…and no way to know what the market will look like after the projected 10-15% correction in 2023.
We did look at the property. Its driveway had easements to go through a church parking lot and the driveways of three other houses. It was so steep, I couldn’t get the van up it.
No wonder it was cheap despite being on three acres. We will pay the apartment rent for the 22 year old with MESP funds and the dorm fees for the 18 year old with her MESP money.
Both of these cover water, sewer, Internet, and electric and all maintenance. I almost forgot how much I hated being a landlord…then I remembered.
I have read different takes on this approach (and you are not the first person to think of it). This one says it’s a no-go: https://www.savingforcollege.com/article/can-i-pay-my-mortgage-with-529-plan-money#:~:text=Mortgage%20Payments%20Do%20Not%20Qualify%20as%20Room%20and%20Board&text=Even%20if%20the%20student%20were,a%20qualified%20higher%20education%20expense.
Short version: if the student owns the house, the mortgage payments are not “qualified educational expenses” (so you can still use 529 money but it will be taxed). If the parents own the house, they have to declare the “rent” paid by the student as income on their taxes, so again you lose the tax benefit.
That’s the internet version, you might want to check with a tax professional.
I agree it would have to be declared as taxable income/rent by the parents if you choose to do this.
See my post above.
Thank you for your reply…another reason not to do it.
Thank you for reading, and I’m glad you enjoyed it! Check back in a year to see how it all turned out 🙂