Podcast #73 Show Notes: Raising Exceptionally Talented Children
All of us think our children are exceptionally talented. Most of us are wrong.
When Dr. Anne Champeaux sent in her podcast guest application I thought her experience raising a professional tennis player son would make for an interesting discussion. And it did. But this interview covers even more great advice and information for WCI listeners because of Dr. Champeaux's experience as a military and academic physician. She is in her forties. Raising a very expensive tennis star. Financially independent. Married to another physician. But before you say, “oh she is only financially independent because they are a dual physician income family” make note that they were both military physicians for most of their careers, topping out at $250,000 a year. Combined. Still think financial independence is too difficult to achieve?
Before we get into the interview with Dr. Champeaux, please tell me you have made a plan for your student loans. If you are going for PSLF, awesome. If you are not and have already refinanced and gotten a low rate, fantastic. But if you are sitting on loans at 6-8% with no intention of working for the government or a 501(c)(3), what are you waiting for?! Right now go to Splash Financial and check your rate. Hopefully, that will convince you to refinance today.
Podcast #73 Sponsor
[00:00:20] Splash Financial is a leader in student loan refinancing for doctors, offering fixed rates as low as 3.25% APR. Hundreds of you check your rate with Splash each month, and it only takes minutes to do so! They're one of the few companies that offer a great resident and fellow product as well, offering low rates and deferred payments for up to 84 months. They also don't charge any application or origination fees and have no prepayment penalties, meaning you maintain your payment flexibility. Splash's new lower rates can save doctors tens of thousands of dollars over the life of their loans. Visit Splash Financial today to get your rate in minutes!
Quote of the Day
[00:02:40] Dr. Champeaux's financial success could be summed up by saying, they saved a lot of money and let compounding interest do it's thing. Pretty much what our quote of the day is about in this episode.
“The first rule of compounding is to never interrupt it unnecessarily.”-Morgan Housel
[00:01:04] Thank you so much for what you do. I'm reminded every time I go to the hospital that the work we do is important work. For the medical professional listeners, we may forget that there is more to our careers than just the technical aspects of diagnosing and treating illness. Observing and learning about people and how to motivate them sometimes is the most difficult and challenging part of our jobs but also the most rewarding. So thank you for what you do.
[00:01:49] This business is really about helping busy high-income professionals take care of that income so that you can live the life you want. One of the ways I am trying to help readers do that is through the free monthly newsletter. Have you signed up for it already? It updates you on what is going on at the White Coat Investor. It gives you links to all the best physician finance stuff that has been published over the previous month. There is a market update in there and a super secret blog post that doesn't go out on the Internet. You actually have to sign up for the newsletter to get it.
In addition to all that great stuff you also get the free financial boot camps series. It has been almost a year since new subscribers have started receiving this 12 e-mail series that will take you from zero to hero in just 12 weeks. It has gotten great reviews and will catch you up to all the people who have been listening to and reading the WCI for the last seven years.
There are really three important topics in this interview. I want to point out the lessons learned for each of those topics, starting with the military.
[00:04:31] Like me, Dr. Champeaux used the HPSP to pay for medical school. Unlike me, she actually stayed in the military for 13 years. Then she did the military buyback. She bought 13 years plus worked for DoD for 5. So she has 18 credible vested years in her pension. She can't take it right away. So there is some risk involved. But the math at the time when she did the buyback is such that she would need to collect her pension for just one year and she will have recouped her payment. This program is not advertised well and there are plenty of military physicians who later work at VA or continue to work DoD as a civilian employee at the military hospitals. So we wanted to make sure people were aware of it. More information can be found at Military Buyback 101.
[00:17:45] Dr. Champeaux, along with Dr. Anne Mills, actually published an article on financial wellness in the Archives of Pathology. We have this whole training now with the ACGME , wellness being a very huge topic. It is part of the common core program requirements now and specialties specific requirements. We have the burnout press, physician suicide press and then obviously at the same time we have this financial illiteracy of our physicians and higher earning income professionals. So it was like the perfect storm to put a financial wellness topic into the medical literature. Dr. Champeaux said this about the article,
“It is just basic stuff, it's kind of unfortunate that the young physicians go through all this education and training and at the end of the day no one has really told them what to do with their first paycheck. And it's been very well received, a lot of people have contacted us saying you know this is great. I wish they would teach us this stuff. Why don't they teach us the stuff?”
She shares that more academic physicians can publish these types of articles. The ACGME in training programs is really looking for how do we make residents well. We know that managing your finances well alleviates stress and will increase residents overall wellness. One quote I particularly liked from the article was from Dr. Anne Mills,
“The other thing to bear in mind about the Joneses is that they may be making terrible financial decisions. Those poor decisions are easy to make in a culture that prioritizes material goods and that confuses “can get a loan for” with “can afford.” One of the gifts of medicine is that we are reminded daily of what really matters in life; when pressured to buy into the consumerist culture, tap into that perspective and focus on the joys and privileges already available. Rather than buying frivolous or unneeded items, think about benefits of not spending that money, or of spending it more deliberately on items or experiences more likely to generate durable happiness. Financial reflection can be an incredibly freeing exercise, particularly for the first years post training when building financial stability. This practice also helps foster gratitude, a key element of physician burnout prevention.”
This is true. We talk about delayed gratification. As physicians we go through all this hard work of college and medical school and residency. So of course at the end you want to run out and buy the most fancy car you can. But is that what is really important to you? Dr. Champeaux thinks if people learn to reflect early on, they are not going to make some of these financial mistakes because they won't get caught in the trap of keeping up with the Joneses.
I hope in the future we see more articles published by academic physicians on financial wellness. Dr. Champeaux has been doing some lectures on financial wellness that are very well received. She said she has been keeping track since she has been involved in this wellness niche for a while, of what is offered at our universities in terms of wellness. By and large the vast majority of wellness seminars and lectures have very little on how to manage your money to make your life less stressful. We are making progress but there is more that can be done.
Raising An Exceptionally Talented Child
[00:31:34] Raising an exceptionally talented child can cost a lot of money. Dr. Champeaux said easily $50,000-$75,000 or more a year when you add in all the equipment, lessons, travel for competition, and expense of educating them. How did they manage all that? They have always lived off one income. That is the big secret that has let them support their tennis star and become financially independent in their forties.
Her advice to readers:
- Invest in the stock market. She has seen people who are saving into their retirement accounts but they put it in a money market. And that's it. Not enough risk. You will never get the returns you need.
- Be patient. Financial independence won't happen over night. Give compounding interest time to do it's thing.
- Pay off your debts. They paid extra on their mortgage to become debt free early in their careers. Financially successful people don't have debt.
Dr. Champeaux is relatively close to retiring and becoming a full time tennis mom. That is the cool thing about financial independence, you can do whatever you want!
Just a last reminder to make sure you are signed up for the free financial boot camps series.
Intro: [00:00:00] 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's your host Dr. Jim Dahle.
WCI: [00:00:20] This is white coat investor podcast number 73, Raising Exceptionally Talented Children, an interview with Dr. Champeaux. Splash Financial as a leader in student loan refinancing for doctors, offering fixed rates as low as three point twenty five percent APR. Hundreds of you check your rate with Splash each month and it only takes minutes to do so. They are one of the few companies that offers a great resident and fellow product as well. Offering low rates and deferred payments for up to 84 months. They also don't charge any application or origination fees and have no prepayment penalties, meaning you maintain your payment flexibility. Splash's new lower rates can save doctors tens of thousands of dollars over the life of their loans. Go to White coat investor dot com slash splash financial today to get your rate in minutes.
WCI: [00:01:04] Thank you so much for what you do. I'm reminded every time I go to the hospital that the work we do is important work. I had a 35 year old male with 18 hours of migratory right lower quadrant pain recently. And it was interesting, you know, it was pretty obvious within about 30 seconds what was going on with him. I decided to take a past medical history anyway and the thing he said just cracked me up. He said, I'm usually awesome except in this moment right now. And you know it's really funny some of the things patients say sometimes and we forget that there's more to our careers than just the technical aspects of diagnosing and treating illness but really observing people and learning about people and how to motivate people sometimes is the most difficult and the most challenging but also the most rewarding part of our jobs.
WCI: [00:01:49] Make sure you're signed up for our newsletter. You get this great newsletter we send out once a month. It updates you on what's going on at the White Coat investor. It gives you links to all the best physician finance stuff that's been published over the previous month. There's a market update in there and there's a super secret blog post in there that doesn't go out on the Internet. You actually have to sign up to the newsletter to get it. In addition to all that great free stuff you also get the free financial boot camps series. This is a 12 e-mail series that will take you from zero to hero in just 12 weeks and catch you up to all the people who have been listening to the White coat investor and reading the white coat investor for the last seven years. You can catch up in just a few weeks. All you have to do is give us your e-mail address and sign up for that e-mail newsletter. You can do that a white coat investor dot com very easily.
WCI: [00:02:40] Our quote of the day today comes from Morgan Housel who said the first rule of compounding is to never interrupted it unnecessarily. Now we've got a great guest today we're going to get into this podcast with Dr Anne Champeaux and I hope you really enjoy it a lot. We'll be talking about some important information for those of you with exceptionally talented children. I mean really talented not just how we all think our kids are awesome.
WCI: [00:03:03] Today on the white coat investor podcast we have very special guest we have Dr Anne Champeaux who is a pathologist in fact that chair of pathology at the University of South Florida who has agreed to be with us on the podcast today. Welcome to the podcast Dr. Champeaux.
Dr. Champeaux: [00:03:19] Thanks Jim for having me. I'm glad to chat with you today.
WCI: [00:03:23] This has been pretty interesting actually we recently put it in the process we had lots of people contacting us that wanted to be guests on the podcast. And so we said, you know what, most of these people are just coming on here to promote their business or whatever. And so we actually put this application process in place and you are the first person we accepted through the application process so we're excited to do it. And just to let people know we actually will take people onto the podcast as guests if they apply. But at any rate, it's great to have you here. I know you're on the white coat investor forum as well. You go by bean1970 there and you've had a fairly illustrious career. I mean you're the chair pathologist at a university and also until very recently the program director for the residency there and you're also a veteran I understand and served as a program director in the military. So which branch were you in?
Dr. Champeaux: [00:04:26] Army.
WCI: [00:04:26] And how did you end up in the army? What happened?
Dr. Champeaux: [00:04:31] I think like most people it comes to finances. I'm from Wisconsin. I left to go to college at Michigan State University. And I have to give the army credit. After the first semester they sent letters to everybody that made the dean's list basically touting you may be eligible for a scholarship. So my mother sent it to me, like highlighted. And I had no prior experience with any of that. I was not military like for lack of a better classification.
WCI: [00:05:11] I think that applies to most of the medical core doesn't it?
Dr. Champeaux: [00:05:14] I think so. And you know I just went through the process and applied and they gave me a three and a half year scholarship because I obviously had already paid for my first semester. And I loved it. I loved ROTC. You know it was like my group of friends. It was my social life. Getting up for PT on Friday mornings wasn't the best when you're a college student but looking back those were some of my best times in college or with the ROTC group.
WCI: [00:05:52] Let's go back even a little bit further. You mentioned your mother. Tell us a little bit about your family and your upbringing and your education?
Dr. Champeaux: [00:05:58] So if people can't realize from my crazy accent. Yes I am from Wisconsin and I grew up right outside Green Bay on Lake Michigan, just kind of a normal family. My mother went to Marquette University, she's a dental hygienist, now retired. And my dad was the director of marketing for a large food service corporation that made stainless steel products. And I have a younger brother. I was just always kind of a science geek and I knew from very early on I wanted to be a physician. So I pretty much went my whole childhood, High school, college, knowing exactly what I wanted to do.
Dr. Champeaux: [00:06:40] And like I said I went to Michigan State. I knew I pretty much wanted to land back in Wisconsin for medical school so I wanted to venture out for four years rather than be at the same university for eight so I left home those four years. I was in ROTC. I loved it. So of course when the time came along to look for money for medical school I just kept going. So I had the HPSP scholarship. Looking back, my husband always says, why did you do that? It was so cheap for you to go to medical school in your state. But you know I liked it. So my husband who is also military was HPSP. He went to Tuffs. So of course which was and I think still is like one of the most expensive medical schools in the country and had the army pay for it. So he's like you should racked them at least.
WCI: [00:07:31] You know I wonder if people will look back in 15 years and go why did you get the HPSP scholarship? Medical school tuition was only eighty thousand dollars a year. You know who knows what it's going to be in another couple of decades.
Dr. Champeaux: [00:07:44] Oh I know. I know. But you know being an HPSP wasn't bad either because you know you got some living expenses. Obviously they covered all your books. I mean it was quite advantageous from a financial standpoint to be on scholarship as well.
WCI: [00:07:58] Well take us through that. Now when you came out of your training and owed the military some time or rather when you came out of medical school you probably ended up in a military residency I would imagine. So tell us about your career through that. And up until this point.
Dr. Champeaux: [00:08:12] So back then pathology was a five year program so you started out generally in the military doing some sort of internship. So I did a kind of a vanilla transitional year internship. I was at Madigan Army Medical Center. I completed that and went right straight through then into pathology which is four years. So I was there for four years. I met my husband while I was there. He had just finished his fellowship. So he was a brand new attending. And I was in training. We did end up getting married and I had a child during residency. So like most residents it can be a crazy time. That time in your life trying to train and accomplish a lot of other things.
Dr. Champeaux: [00:09:00] And then I stayed there as faculty. So this is kind of funny. When I left the service at 13 years, you know they tell you show up with all your orders and this, I came with one piece of paper. That was literally at the same place for 13 years. And I never left.
Dr. Champeaux: [00:09:19] I moved offices a few times but I never left. So I was there a long time. Obviously my husband was there with me the entire time, active duty. He retired and I had a couple of years left. So what happened then. We'll kind of get this to this I know later in our discussion but because of what was going on with my son I decided to stay working there part time. So I continued to work at the Army hospital on a part time basis. My husband was still there he was retired now working as a DOD civilian. And I did what's called, and I don't know if you've talked about this much on your blog or website or your podcasts, but I did the military buyback. Have you talked about that?
WCI: [00:10:08] I don't think I have. Why don't you tell the listeners about the military buyback. I'm sure someone will find it very interesting.
Dr. Champeaux: [00:10:13] So the military buyback is basically you pay them the government, you buy your years back and convert them to civilian time. So if you're continue to work for the government, DOD or V.A. They do a calculation and tell you how much it's going to cost to basically buy your active duty time and convert it to either V.A. or DOD time. What that does then, because you could say well I left that 13 years and I had no time towards my retirement, after I count my DOD time now I have 18 years towards retirement into the system.
WCI: [00:10:55] So you're much closer to V.A. or DOD retirement that way.
Dr. Champeaux: [00:11:00] Right. I get it. I'm vested because I paid for it, for the five years, so I am vested and I have 18 years.
WCI: [00:11:07] Cool cool. So that is a pretty nice little benefit you're looking forward to.
Dr. Champeaux: [00:11:11] Yes. I can't collect it till later. But I mean that's the risk obviously you pay into and you hope that you live long enough to collect I guess. But yeah so my active duty time wasn't lost.
WCI: [00:11:24] Now my last couple of podcast guests that I've had on here are much closer to the beginning of their career than you are. They're still struggling with student loans or just having gotten them paid off and you're kind of a little further along in the career. But you're well known in physician financial circles. Not only are you on the white coat investor forum but you're also pretty prominent in some of the women physician financial Facebook groups where you use your married name Anne Shachter. But where are you at in your financial life and what are your goals from here going forward?
Dr. Champeaux: [00:11:57] So this whole concept of being financially independent was never in my vocabulary until we left where we were out in the Pacific Northwest and moved to Florida. We'll talk about the tennis in a little bit I know later but we moved to Florida in 2013 and I had landed this job at the university as the residency program director. And my husband kind of followed along a little later and basically started a locums career at that time and it was a little you know he was a little unsure of it. He had been used to working full time all the time and we had met with a financial adviser at the time just because we had a lot of you know big financial changes going on at the time and they kind of looked at us and said you know you don't really need to work if you don't have to. And I was like what? And you know they showed us the numbers and I thought it was crazy because it just never really dawned on me you know because we've just been going along doing what we always were used to doing, which was actually, what I call living off of one income and stashing the rest.
Dr. Champeaux: [00:13:09] And so you know that's really what happened. And when the Facebook group fired off I landed in the finance to start with. I had always been financially savvy, when I joined the military obviously a long time ago, there was no option for retirement other than stay in for 20. So right off the bat luckily I must have stumbled into a conversation they are like you know you need to put away your own money.
Dr. Champeaux: [00:13:43] I was like really? They were like yeah! So my husband obviously kind of knew what was happening and so I started reading financial books when I was an intern and I had my own IRA. And obviously you know I got married soon after my husband and I started stashing our money away together and you know that's 20 years ago. And so you can imagine you know compound interest over 20 years.
WCI: [00:14:09] And now at this point you find yourself financially independent just you know 20 years out of training which is actually pretty remarkable. That's actually a fairly quick path compared to most physicians and frankly most Americans.
Dr. Champeaux: [00:14:22] Right. And yet you know a lot of people will say like well you are military and you didn't have the student loans and I hear all that. But you know I had gone back and just kind of wanted to look at some numbers. And kind of at the height of our military career when we were both active duty. So you know double income physician family, I'm a pathologist, my husband is an interventional cardiologist. We were making 250,000 dollars combined.
WCI: [00:14:54] Yeah that sounds about right. You know you know it's funny I get that a lot too. You were in the military. That's why you're doing so well financially. And I'm like like that option wasn't available to you Number one. And number two you know it's really a contract more than a scholarship. You know you're basically getting some money upfront in exchange for less money later. A lot of people don't understand about the HPSP scholarship. It's great if you want to serve your country. That's probably the way you ought to pay for your medical school but it's not like some financial boon you know. A scholarship is definitely not the right word for it just because it's not free money. It's money that comes with strings attached and those strings often mean living someplace you don't want to live. They often mean moving frequently, obviously not in your case, and particularly in specialties like emergency medicine. It means you're going to spend some time in the Middle East. And it's far from being free money.
Dr. Champeaux: [00:15:54] So I always think well if we were in private practice even if we had loans it would have easily been able to be put in our budget because we wouldn't have been making 250 combined.
WCI: [00:16:04] Right. You would have been making five hundred instead or 800 or who knows how much more just because you can get paid more outside of the military. I can certainly relate to that. You know it's interesting I think I probably could have gotten out of medical school with about 70000 dollars worth of debt and I could have paid that off by December of my first year out of residency. You know I actually ended up owing more time than I would have ever owed money just because medical school is so cheap the year I went.
Dr. Champeaux: [00:16:32] But I have to say though you know the one thing kind of. And I think you've alluded to this on some prior podcasts, that the military did do for us. You know you kind of get used to living somewhat more frugal I think because you just don't know if you're going to move. You're wearing a uniform. So I'm not at Nordstrom's buying St John's suits and pumps and you know flashy handbags to bring to work.
WCI: [00:16:56] It is hard to spend a lot of money on uniforms isn't it?
Dr. Champeaux: [00:16:58] They're expensive. But you don't need that many. We used all the services available to us. So we always use the gym on post. You know we didn't have gym memberships. We shopped at the commissary. We shopped at the PX. My kid was in the daycare on the post, which of course is subsidized. We really tried to use every single thing that was available to us to help us financially all those years.
WCI: [00:17:25] You know it really is in a lot of ways part of your salary when you look at all the benefits of being in the military and you should take advantage of as much of it as you can for sure.
Dr. Champeaux: [00:17:33] Plus free health care.
WCI: [00:17:34] Yeah that's a big one especially a lot of these people that are you know trying to retire early. They're always asking What do you do about health care? Well if you to a military retirement you've got that covered.
Dr. Champeaux: [00:17:44] Correct.
WCI: [00:17:45] OK now you've actually published an article on financial wellness in the archives of pathology. Tell us a little bit about why you did that how it was received and especially how more of us can do it.
Dr. Champeaux: [00:17:57] So I have to give credit to the other author, the other Anne, Dr. Mills. She approached me. We had met through our college meeting and then obviously she's active in some of the groups as well and you know it's definitely like a perfect storm right now. We have this whole training now with the ACGME wellness is a very huge topic. It's part of the common core program requirements now and specialties specific requirements. Of course the burnout press, physician suicide press and then obviously at the same time we have this financial illiteracy of our physicians and higher earning income professionals. So it was like the perfect storm that you put a financial wellness topic into the medical literature. So we said let's just go for it. And you've probably read it obviously, maybe you skimmed, it has a little bit of a pathology twist with you know we talk about grossing specimens and things like that. Comparing some of these things that we're trying to do. But you know it's just basic stuff, that you know it's kind of unfortunate that the young physicians go through all this education and training and at the end of the day and no one's really told them what to do with their first paycheck. And it's been very well received, a lot of people have contacted us saying you know this is great. I wish they would teach us this stuff. Why don't they teach us the stuff? I mean this is your you know dog and pony show. I'm not telling you anything you don't know.
Dr. Champeaux: [00:19:39] And I think others can do it because particularly the ACGME in training programs is really looking for how do we make residents Well. And you know residents are stressed enough with their time. They have other stressors, family life and they're broke for the most part. So if we can do anything to help make their lives better. I mean you should try to do that. I find the most difficult thing with the residents is a lot of them don't even know what's happening to their money. They have no budget. So it's very basic really just how they take their paycheck and split it up and they need to know what's come in and what's going out.
WCI: [00:20:23] You know it's amazing how much of a difference you can make just by teaching the basics isn't it? So let me read a quote from your article, You said the other thing to bear in mind about the Joneses is that they may be making terrible financial decisions. Those poor decisions are easy to make in a culture that prioritizes material goods and that confuses “can get a loan for” with “can afford.” One of the gifts of medicine is that we were reminded daily of what really matters in life. When pressured to buy into the consumerist culture tap into that perspective and focus on the joys and privileges already available. Rather than buying frivolous or unneeded items, think about the benefits of not spending that money or spending it more deliberately on items or experiences more likely to generate durable happiness. Financial reflection can be an incredibly freeing exercise, particularly for the first year's post training and building financial stability. This practice also helps foster gratitude, a key element of physician burnout prevention. Why did you think that was important for pathology trainees to know?
Dr. Champeaux: [00:21:22] Well it's not only pathology trainees obviously. It's first of all trainees and then you could say this is really for all physicians and you could even say this is really for everybody. You know we just really we live in this huge society of consumerism and as you know physicians have this stereotype of you know we're supposed to have the big house, the big car, and go on the fancy trip, and wear the nice clothes, and have all this know excess cash. But the reality is you know the residents are broke. They're a negative net worth. Like I said they don't know where their money is going. And you know we see a lot of sad things every day and I think at the end of the day you really have to reflect on what's important to you. And I give Dr. Mills credit this is actually one of her well written paragraphs. But it's true and I think you know there's this of course that delayed gratification that everybody talks about. You go through all this hard work of college and medical school and residency you know. So of course at the end you want to run out and buy the most fancy car you can. But you know is that what's important to you? So I think if people learn to reflect early on they're not going to make some of these financial mistakes because they won't get caught in the trap.
WCI: [00:22:47] Now we talked a little bit about your time in the military and what it was like to be a military physician. You've also had the opportunity to be an academic physician. What are the best and worst parts of doing that? Do you have any regrets as you close in on the end of your career?
Dr. Champeaux: [00:23:01] So so even though I was in the military that was also academic because I was always at a tertiary care center with training programs. So I really transitioned from one you know pseudo academic setting obviously into a full fledged academic center. So I've always been you know very interested in resident education. You know I tell the faculty you know this is the future of medicine. You know these are the people that are going to take care of my family. So you know it's really important that we have great educators out there and people training residents in all specialties. Some days it can be really tasking and rough to work with residents. But it's so rewarding when you see them later and what they've done with their careers or you get the holiday card or they call you up and tell you how fantastic they're doing. And thank you for all you've done for their career. And I think that's what drives me anyways. Because as you know academic's is not real fiscally rewarding For most physicians as well, generally lower pay than are private practice counterparts. So that said you know the kind of things that go on in academics at the end of the day are not much different than the military and I tell a lot of my friends I think it's worse. Just because there is the money involved when you're out. That was really the nice thing about being in the military that it was just really this collegial environment that you didn't really worry about money or how much the procedure or the test is costing because the patients were covered. You didn't deal with insurance companies. You didn't have to deal with billing. You knew what everybody was making. It wasn't a big secret. So that was obviously very different in the military and then of course when you get out into civilian you know at the end of the day that's very money driven almost. It is almost bad I kind of think especially when I had a career so long where that wasn't the focus. But obviously that's the way it is.
WCI: [00:25:13] Even in the academic world you're not shielded from that are you?
Dr. Champeaux: [00:25:17] Oh no definitely not. Definitely not.
WCI: [00:25:19] You've been doing some lectures on financial wellness. How have you found them to be received and have you found that people who are willing to pay you to come speak to them?
Dr. Champeaux: [00:25:30] Well once again I think very well received. I think it's a niche that a lot of peculiarly training programs and medical schools haven't addressed. Even though we know there's been literature published in the past that says that trainees need this kind of training and education. So it's been very well received. You know I've been kind of keeping track since I've been involved in this wellness niche for a while. Even what's offered at our university in terms of wellness. By and large the vast majority of wellness seminars and lectures are all, and they're great, but you know a lot of it's like meditation and yoga. And a little tricks with the EMR to make your day better and those kinds of things. Very little on how do you manage your money to make your life less stressful because you're well aware the Medscape survey on compensation. When you look at physician burnout. The one question the top one is increased compensation to reduce or avoid financial stress. That's number one. So and I think moving forward physicians having more compensation isn't really going to happen. It's going to be more like how do you manage what you have.
WCI: [00:26:54] Certainly there are worries in many specialities about compensation flattening or even decreasing. And that's happened in the past. If you go back and look and all of a sudden if you know 30 percent of your work is one procedure and that procedure gets cut, you know in how much it reimburses it can really affect you pretty quickly on the bottom line.
Dr. Champeaux: [00:27:14] Right. So I think this is really a niche. And like I said it's been very well received now. I don't really get paid to do this obviously in academics not much is paid for. But that's OK. It's been good.
WCI: [00:27:25] Yeah that's kind of what I've found as well. It is that it's incredibly needed. It's incredibly desired. I think I could speak four times a week if I was willing to come out just for expenses. And the truth of the matter is most physicians time, they're just not willing to pay what most physicians time is worth to teach that material. And I think that's unfortunate but that's just the name of the game. I've discovered you know as the white coat investor LLC has gotten bigger over the years that that speaking fees become a smaller and smaller part of our of our income here and I think that's just natural. People want the information but they also want it for free. So it's good that people are doing it and I hope more academicians get into that niche and really find it as a way to become academically successful because I'm not sure that need is going to be met if people actually have to pay for it.
Dr. Champeaux: [00:28:19] No but like I said with the push from the ACGME anyways and residency training and ensuring wellness I think you're going to start to see more of it because it's going to be tied into some of the things that programs are doing.
WCI: [00:28:33] Yeah I'm certainly happy to see it. Now I can't get into the women physicians Facebook group but I understand that you're big in there. You're a big proponent not only of being in there and promoting financial literacy, for which I thank you very heartily, but also that you're kind of behind a big idea of living on one income and saving the other. Tell us about that and why you advocate for that approach particularly with these two professional couples.
Dr. Champeaux: [00:29:00] Well I think just looking back you know people say like how did you do what you did. You know when I look back and really that's what we did. And I think for dual high earning professionals, particularly dual physicians, there really isn't a whole lot of reason you need to spend away two incomes. You know you're generally living lavishly then and for the most part I think that really just gets couples in trouble with the lifestyle creep. They really start to spend out of their means because things just get more expensive over time and things come up. For instance you know my parents are retired now but when they retired they didn't really account for like cell phone costs and all these electronic costs and you know things that weren't around in the 70s when they were saving for retirement. So I think like who knows what we'll be saving for 20 years down the road and what things are going to cost. So I think having a buffer is not a bad idea number one. Number two my husband I have always been of the philosophy never trust anybody so we've always like not counted on Social Security or other things to bail you out down the road. You know take care of yourself first. No one else is going to take care of you. And third, you know we'll talk about my son in a little bit I know, but you just don't know what's going to hit you. And what kind of expenses you may run into and having the ability to just say I can do this for you. Or we can go on this trip. You don't have to think twice. It's feeling like you can't describe. And I just run into so many physicians that are just strapped. And you're like How can you be stretched? You have two physician incomes coming in?! So I think having the buffer that I call it. So not only saving 20 percent of your income to catch up with other people who have been working right out of college but then save the rest as like your play money buffer. And you'd be surprised what it can do because first of all it's going to grow over time. So you don't even have to do with that long and you'll have a nice pot of money.
WCI: [00:31:13] Well let's get into the main reason we brought you on today. I'm titling this podcast Raising Exceptionally Talented Children. And you have a fairly exceptional child, a high performance athlete, tennis in this case, we're talking about your son. And let's have you talk about the finances behind that and similar pursuits such as the arts.
Dr. Champeaux: [00:31:34] So obviously a lot of people talk about saving for retirement and the other thing that most people will save for obviously is their children, their education. Which is fine and people have different philosophies, how much to save, and how to save for it, and whatnot. But the nice thing about that is you have 18 years to save. You know what we ran into with having a high performance athlete which comes with a lot of expenses is by the time my son was 7 money is just bleeding out at an alarming rate and some activities are more expensive than others. So the individual sport, things like tennis, equestrian, figure skating, and then obviously special art. So you can get into the very talented pianist and some of the string instruments where you're talking lots of lessons, traveling to recitals, and putting them in special schools. So a lot of these things aren't uncommon and they're not cheap. And so having the fact that we did live off of one income and had the significant buffer we really could afford to provide what my son needed.
WCI: [00:33:00] Let's give some idea to people that may not have a child like this. I mean how much can you spend on a kid playing tennis? I mean how much does a tennis racquet and a few balls cost right?
Dr. Champeaux: [00:33:11] So generally if you go to the store and buy a racquet and can of balls and go to a public court you're like how expensive can this be?! I'll just tell you if you had a pay for everything. He goes through like five racquets a year. There are like 200 dollars a pop. He breaks a string every day so you have to buy string. It's like 20 dollars and then if you pay somebody to string it that's another you know 10. So you're like 30 dollars a day on stringing. He runs through a pair shoes a week which are like a hundred dollars for size 13 shoe and then you're paying for coaching fees and travel. And before you know it it all adds up. And I sent you an article that was written several years ago. You know they say it's at least two hundred thousand dollars to raise up professional tennis player.
Dr. Champeaux: [00:34:02] I would say that's on the low end because generally you also need to accommodate their education which means for most of the kids playing tennis at my son's level they're either in private schools that accommodate their travel schedule or they pay for private home schooling which is also very expensive.
WCI: [00:34:22] This could easily be 20 50 75 thousand dollars a year.
Dr. Champeaux: [00:34:27] Oh yes easy.
WCI: [00:34:29] So how did you afford to spend that much on one child's recreational pursuits? I mean I just imagine this I'm thinking about these parents that aren't two physician couples trying to afford this. What do you think about the parents who sacrifice their own financial stability to chase a dream like that?
Dr. Champeaux: [00:34:47] So I could tell you for the most part when we do travel with our son. You know the kids playing tennis generally one parent will be some sort of high income earning professional because you know how else are you going to pay for this?
Dr. Champeaux: [00:35:04] You run into the few who don't. And we've seen all kinds of things. We've seen people who have sold their homes and all their possessions, working extra jobs obviously moving to various locations because to lessen the travel load. So like where we were living before in the Pacific Northwest it was very expensive because we had to travel out of the area to play these big national tournaments because they're all outside in warm weather. So we're in Florida now which is essentially the mecca of tennis. We don't have to go very far to play a national tournament. So travel expenses could be curbed that way. We do get some help. So my son he was the youngest kid at the time to ever sign a full Wilson's sponsorship. He was like 9 at the time. So we don't pay for racquet strings and bags and grips and he also had a clothing contract that started around the same time. So there have been some things that have been offset but still it can be quite expensive.
WCI: [00:36:18] So let's talk a little bit about earnings from a child's pursuit. What have you learned this interesting about tax aspects and those sorts of things from these earnings?
Dr. Champeaux: [00:36:27] So for the most part Junior Tennis and a lot of other things you know is not an income producing entity until they go professional. So my son's going to play collegiate tennis but they have some exceptions. So he could still play professionally. It takes a certain percentage of earnings up to a certain point plus expenses and not violate the professional amateur rules. So the interesting thing we learned is you know these are all considered prize earnings. So from a tax standpoint there taxed as prize earnings and you can't put them in for instance into a Roth. So I was thinking like wouldn't that be great I could open my kid a Roth IRA. He could shove in all these earnings into there and let them grow. But because it's technically not earned income even though as a professional tennis player that's how you earn your living. You can't use an IRA, kind of interesting. So like yes when Tiger Woods wins the golf tournament he can't put those winnings into a retirement account.
WCI: [00:37:32] I imagine you also don't pay payroll taxes then if it's not earned income. Is that correct? So pluses and minuses both ways there I suppose.
Dr. Champeaux: [00:37:42] Right. The other thing that makes it complicated is you know tennis is an international sport and so a lot of these earnings, like for instance this summer were in different countries, so there's that standpoint to it, you know he's earning income in different countries and you have to deal with the foreign taxes. But that's why we have an accountant.
WCI: [00:38:00] So I mean did the tournament's withhold some of the money for taxes or you're just kind of on your own. Go higher an international accountant to sort it out.
Dr. Champeaux: [00:38:09] No. It's interesting that this is kind of interesting. All the prize money for the ATP are all paid in U.S. dollars no matter what country you're in. But then it's just reported what country you were in when you earned them.
WCI: [00:38:24] Sounds like a mess of tax return.
Dr. Champeaux: [00:38:25] I know. But obviously what comes later for professional athletes and how they do get wages is when they have sponsorships and are obviously paid wages by companies for their promotional activities.
WCI: [00:38:39] So how much has this affected how much you saved for college? Is spending money on competitive sports equivalent to saving money in a 529?
Dr. Champeaux: [00:38:50] When our son was born five two nine plans had just come out. So before that people saved either via their own savings or UTMA account. So when he was born we decided well let's kind of do both because we'll just see you know. I wasn't putting very much money in. I mean this is obviously before he started playing tennis and then we just happened to live near a very expensive private school. And so he had gone to a very expensive private school for elementary school. You know and I was just thinking I'm just paying for this out of pocket. You know why would I ever need to save all this money for college down the road? So I've really never upped my contributions into his 529.
Dr. Champeaux: [00:39:38] I just kind of had this like low level monthly contribution into his five two nine and his UTMA. And then obviously when the tennis came along. I said Well I'm not going up at now either. But at the end of the day you know it still is a nice tax sheltered asset protected, in our state, pot of money. We will have some expenses. You know he might need a computer. He's living off campus. So the housing I'm going to pay for. I just didn't go crazy with the five two nine because we are cash flowing the public school and so I think like you know we've seen on the forum, it's a very private, personal decision, how people are going to save and how much they're going to save. A lot of it depends how many kids you have. We only have the one child. So you know overfunding a five two nine is at some risk because if there's money leftover it's not going to be used for any other siblings.
Dr. Champeaux: [00:40:39] The other thing is you know people say is well you know he'll get a scholarship. The individual sports in NCAA collegiate are pretty difficult to get full rides mostly due to Title 9. So for instance I'll just give you examples so like a football team may have 80 full ride scholarships per year to divvy out. Tennis gets four and a half across the board every single division one school in the country. Four and a half scholarships to divvy up between their 10 to 12 players.
WCI: [00:41:16] Yeah that's obviously a pretty dramatic difference. I assume they justify it based on the fact that there aren't tennis stadiums on most college campuses that seat 80000.
Dr. Champeaux: [00:41:26] Correct. So there's always you know even over the years saving you have to worry you know. But what if he quits. He could just wake up one day and say I'm not going to play anymore. So then obviously we'd still have a pot of money to pay for education. He could get injured. Right. That's probably more realistic that he would get injured and not be able to play so. So we still save. But we didn't go crazy putting in you know three four hundred thousand dollars into a five two nine.
WCI: [00:41:59] Now it's interesting. There's a fair amount of a gamble here you don't know when your kids 9 or 11 just how good they're going to be. And do you think a lot of people don't have a realistic assessment of how talented their child is and maybe they've overestimated their talent and are profoundly disappointed down the road when not only did they not become a professional but they don't even get a college scholarship?
Dr. Champeaux: [00:42:26] I've run into people and when you start to tell them the reality of how difficult it is, and there's the statistics out there like 1 percent of people will successfully play professional sports. I guess the definition is what is successful? You know my kid is playing already and has earned prize money on the ATP Tour. I mean he's not making millions. But you know I mean he achieved one of his goals. And so you could argue he's been successful. Yeah it's just hard to know. I mean obviously there's a lot of professional athletes that literally didn't reach their potential till later. You know I'm from Wisconsin so the perfect example is Aaron Rodgers as you know when he was being recruited out of high school no one would take him. And he has all his rejection letters from the various division 1 schools and he went to community college and you know we can go from there.
WCI: [00:43:27] You know he kind of reminds me of Michael Jordan getting cut from his high school basketball team.
Dr. Champeaux: [00:43:32] Right. So it's hard. You know everybody's individual. You know you could make the same argument literally for physicians. You know some people it's late in their career when they decide to become a physician.
Dr. Champeaux: [00:43:46] Some of them have had even careers before. It may not even have done that well in school because they didn't think they were going to be a physician and needed to get good grades to go to medical school. So you know it's never too late for anybody. But at the end you have to be realistic at some level.
WCI: [00:44:04] Now lots of people think they're child related expenses are going to go down after the kids were out of child care and you made a comment earlier about that that maybe that is not so true. Tell me why you think that that's the case.
Dr. Champeaux: [00:44:18] Well you know child care is obviously very expensive. We had to do it. Luckily we were in the military like I said so we had nice subsidized child care. It's still not cheap, you pay for it every day. You know all year round. But you know I start adding things up, even just forget the tennis. You know so we have one son. Teenage driver for instance. You know it's a huge expense not only just the gas. You know you're paying for gas or they might have a job help pay for gas that's fine. But our car insurance tripled. Your umbrella insurance goes on top of that so that triples right there. I don't know when the last time you rented a tux. But I mean I like I was fell off my chair when like you realize like how expensive a prom tux is. And then you do that for four years. They eat a lot. Kids eat a lot. I had a boyfriend in high school who had five boys in the family. And I still think to this day this is why I only have one kid. His mother one day showed me like her groceries and what they go through. And I was like floored. And it was like unbelievable. And yet what my kid can eat and put away. Now granted he's an athlete. It's quite a bit. But it's expensive, it's very expensive. It's like having another adult in your house. And I think you know they have all the electronics, they're going to need you know some sort of you know computer for school and probably a phone at some point. When you travel with them they can't sit on your lap as a free ticket. You know these are all things that just start to add up. And before you know it it's far beyond what child care was.
WCI: [00:46:06] You're preaching to the choir here. I have four of them.
Dr. Champeaux: [00:46:09] Yes. I don't think people really just think about like how expensive they can get.
WCI: [00:46:17] You've been amazingly successful both in your career, you've been able to do a lot of cool things. You also have been very financially successful. You're financially independent at this point. What can you tell our listeners who want to have what you have? What do they need to do to go from where they are to where you are?
Dr. Champeaux: [00:46:34] Well I think the first thing is you have to be patient. So like you said I met the tail end of my career and I'm not even that old. I'm in my 40s but obviously I've done a lot. And financially I've accomplished a lot. My husband and I. So you have to be patient, it doesn't happen overnight.
Dr. Champeaux: [00:46:53] But the reason it happens is literally what I call the eighth wonder of the world which is compound interest. You have to start saving right away. And like I said I was an intern putting what little I could at the time I think it was 2000 dollars you could put in your IRA. You know I shoved it in. Just shove it in. You know let it sit. It's been sitting there for you know 20 years now so I think that's key I think to be very aware of lifestyle creep and budgeting knowing where your money's going. Always be careful to allow for that. I'm not your typical white coat investor follower and I think I've alluded to this before you know. I don't even have anything at Vanguard. I don't do Backdoor Roth. I don't even have really any index funds. But that doesn't mean you know there's a lot of roads to Dublin as they say right. But I think the key element is still the same. It is regimented saving and the way my husband and I did it is literally we set up auto dollar cost averaging or periodic investment whatever, basically it was weekly money that we never saw. Weekly. Weekly money right off the top. Every single week never saw it went into our accounts. And then the other thing that we always did, and we're kind of old like I said, when we had our first home prime interest was 8 percent and I think when we closed our house we got a 7 point eight percent or so. Basically the interest was you know much much higher than it is today. So we became pretty debt averse and we always put extra money towards the mortgage every month. Always. Because you can imagine even that one extra mortgage payment the savings on interest is astronomical. Obviously with the new tax changes in 2018 you know saving on interest you might as well now because for most people it's not going to make any difference in their taxes.
WCI: [00:49:08] That's absolutely right. You know it's interesting I talk to a lot of people that have been successful. And there's this common theme that runs through it. They all tend to be debt averse. You know they tend to have paid off their debts a lot sooner than they had to. Most of them not in sort of you know hard core Dave Ramsey extreme pay everything off before you invest a single dollar you know et cetera. But there's a common theme there that people do seem to pay off their debts early and I wonder if it's the same mindset that leads them to saving adequately also leads them to look at that debt and go I ought to be taking care of that as well. Why do you think that is that so many people that are financially independent earlier in their lives didn't do it by borrowing a bunch of money and you know leveraging up their lives they seemed to get rid of their debt faster than average?
Dr. Champeaux: [00:49:54] Well because I think at the end of the day debt is debt you have to pay interest to somebody else. No matter what the interest rate is there's a portion of that pie that's going to somebody else and not in your own pocket. So the more debt you have no matter what the interest rate is you are losing money. And so I think you know so that's number one. So you know once you're debt free you know every single paycheck you get comes to you other than taxes. So you have the ability then to basically save it as you want or spend it as you want and I think a lot of people like you said that are of that mindset generally probably have some saving tendencies as well because they do understand the math of compounding interest which includes debt interest.
WCI: [00:50:44] You know you mentioned that you're toward the tail end of your career in your forties. So it sounds like you're aiming at an early retirement here. So when will you retire and what will you retire to?
Dr. Champeaux: [00:50:55] Well my plan. You know it's funny how plans change. My plan was to actually retire this year because they always said when my son graduates from high school I was going to hang it up and basically become a tennis mom. He's going to play collegiate tennis, that's going to be a short career. Right. You know college is only four years and then he's going to play on the tour. You know it's hard because you don't know how long he'll be able to play on the tour. You know either one you would hope that he doesn't get injured. But you know careers do end up abruptly short. But I just want to be there for it. I just feel like since I've had this administrative position at the university you know I don't have a lot of free time anymore and I feel like the last few years I've kind of missed out.
WCI: [00:51:44] No free time as the department chair and the program director?! I'm surprised.
Dr. Champeaux: [00:51:50] So right. Someone has to work to pay for all this right. My husband has been doing this locums lately and he's on a two week on two week off schedule. So when he's off and I'm at work you know that's no fun right. So I've always said like well I should probably hang it up. So then when he's home because he travels for his locums at least that we can do something together. So I'm on target maybe for the end of next summer. My husband toys with you know why don't you stay and maybe just do some. We have positions in the school like career coaching and advising and basically things that I could do, nonclinical, just like a half a day a week or something.
Dr. Champeaux: [00:52:37] I don't know but we'll see. I'm just trying to make some plans here in the next six months or so. It is hard for us to hang it up. You know a lot of us are Type A and we've always been used to being busy or being in school or in training so long. So that's one thing and then obviously I have some other things that I was looking forward to. So because I'm military have the post 9/11 G.I. Bill to use. It does expire eventually so I was like geez I'd like to use it before it's gone. And I think it be really fun especially going on these college visits with my son to just go back and get some degree in something. And I don't even need to get good grades. It's not like going go to medical school.
WCI: [00:53:25] It might be nice to go to college and not be premed right.
Dr. Champeaux: [00:53:28] So you know there's so many things that are interesting. So it's like you know I just go back you know get another degree. Use that up. Obviously there's a lot of things on my bucket list for travel. Because we are retired military and we live in a town with the Air Force Base. You know we have access to space A. So you know we have a lot of things we can do. If we're not working obviously.
WCI: [00:53:56] It's pretty exciting to have the freedom to have those options isn't it?
Dr. Champeaux: [00:54:00] Definitely. And I think in that age of where healthcare is going, I think the faster that physicians can achieve that sense of job security in the sense where they're not job dependent. That's what I'm you know alluding at, the better because you know being strapped to a job you don't like because you have to pay your mortgage is no fun.
WCI: [00:54:24] I can definitely agree with that. Our time is getting short. But I wanted to give you a chance to kind of ask anything else you know what are our listeners here in the white coat investor podcast not getting that you can provide to them today.
Dr. Champeaux: [00:54:41] I think you hit a lot of it all the time. I think it is important for people to be patient. Like I said I think we see a lot of young people posting and they're all excited. And obviously they're taking the right steps initially but I think they really need to understand this isn't going to happen overnight. So they need to have some patience. But by having the correct habits early on it will happen sooner than they think. So I think that's really important because at least on the Women's Forum and the Facebook group I think there's a lot that get very frustrated, thinking like this will never happen to me. They're throwing their hands in the air. I think because they just don't realize it takes some time to get to that place. The other thing is I was listening to CNBC. I listen to a lot of business shows because obviously I'm interested in finance and they had a great podcast from yesterday.
Dr. Champeaux: [00:55:40] And you know really to not be afraid to invest your money. You know you could go to the you know no risk no reward. But you know when you look historically the only way to have your money work for you is it has to be in the stock market.
Dr. Champeaux: [00:55:57] You know we just see and you probably see this mistake too. It's so sad to see people who are saving into their retirement accounts but they put it in a money market. And that's it.
WCI: [00:56:09] Especially in the last five years, it's been so disappointing with those low yields.
Dr. Champeaux: [00:56:13] Oh yeah it's very sad. And I know some people are afraid but you know at the end of the day you just have to not be afraid because it is going to be a long haul. That money will sit there a long long time and you'll be OK. So I think that's another thing too that viewers need to realize that you know just don't be afraid. Take a little risk especially when you're young. We've made mistakes too. My husband and I. But you do it when you're young and you recover.
WCI: [00:56:47] It is helpful to make as many mistakes as you can with small dollar amounts early on.
Dr. Champeaux: [00:56:52] I know. It's funny looking back some time some of the things you did or you think like geez if we had only or if we didn't do this what we would have now. But it's OK.
WCI: [00:57:03] Well Dr Anne Champeaux thank you so much for coming on to the White Coat podcast today.
Dr. Champeaux: [00:57:08] Oh thanks Jim. I'm glad I could help out and hopefully the listeners will learn a little bit.
WCI: [00:57:14] Thank you very much.
Dr. Champeaux: [00:57:15] Thanks.
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Disclaimer: [00:58:25] My dad, your host, Dr. Dahle is a practicing emergency physician, blogger, author, and podcasters. He's 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.