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By Dr. Peter Kim of Passive Income MD, WCI Network Partner
You completed the long, arduous journey of becoming a doctor to live your dream life. You made it through the rigorous classes in undergrad and medical school. You survived the long hours and late nights of residency. You're now an attending physician. Congrats! You've made it!
Well, yes, by society's standards, you're a success. You have a respected and important job and a great income. But none of that matters if you're thinking, “Is this what the next 30 years will be like?” as you drag yourself out of bed and head to work.
If you're waking up excited to go into the hospital or clinic and meet with patients, you're probably pretty content and happy with your work. But if it's the thought of your student loan debt or simply paying bills that motivates you to work, then it's time to consider what's keeping you from your dream life. In both scenarios, one could continue like this for years. In fact, many doctors do. They simply live to survive the day. Society, their peers, and their family consider them successful. But are they happy? That may or may not show through. Inwardly, they're not feeling quite fulfilled.
How do I know? Because I've been there. I became an attending and thought I was set. Then, I realized that I wasn't in control of my time and life, and I wanted more. I wanted to live the dream life I thought I was always striving for.
So, how do you achieve your dream life?
It's simple (but not necessarily easy). Similar to how you used goals and discipline to get you through med school, you can make a plan to achieve your ideal life. Let's take a look at a three-step plan to help make this happen:
Create Your Dream Life
#1 Discover What's Holding You Back
The first thing to do is pinpoint what it actually is that keeps you from your dream life. You may find it easy to determine what it is. You may find this challenging.
Ask Yourself Tough Questions
Start by asking yourself these questions:
- Are my work hours wearing me out?
- Is the nature of my job mentally draining?
- Does financial stress burden me?
- Do I fear venturing out of my comfort zone?
- Do I think my family would be disappointed if I changed career paths?
The list is not exhaustive but should help you take an introspective look at yourself. You may find that your fear of “wasting your education” holds you back. But is it really wasted? I say no. You have tons of transferable skills that are useful in every part of your life.
Be Open to Feedback
Also, if you're open to being vulnerable and getting honest feedback, ask your partner or a friend for their perspective on your situation. They can give you their opinion, which will be insightful.
They may be brutally honest. You may not like your partner saying that they think you tend to waste a lot of time on unproductive things. Remember, it's only their view. Take their words with appreciation and reflect on what they say. But don't hold what they say against them if it makes you uncomfortable or upset.
Make the Most of Free Moments
One example is telling your partner that you want to start investing in real estate, but you think you lack time. They might remind you that your screen time report shows you watched YouTube for 60 minutes a day. That's hard data you can't argue with.
Rearrange the apps on your phone so you are more likely to read real estate content during your breaks rather than play a game. Listen to the PIMD podcast during your workout or commute. Skip the funny cat videos and watch relevant ones to help you reach your goals.
After you tuck your kids in bed for the night, grab your laptop and learn more about passive income or a business idea that you have. You can start a blog on a topic you're passionate about. Or research real estate syndication deals to make your money start working for you. Finding moments to grow your mind throughout your day will go a long way toward growing your future.
Silence the Negativity
Finally, try to push aside the limiting beliefs that may pop into your mind. These beliefs manifest themselves as, “But I'm too old,” and “I can't throw away the 15 years of training!” It is easier said than done to reframe these thoughts into positive ones like, “I'm 50, and my years of experience have made me an expert in my field,” and “I am an excellent communicator thanks to my education.”
More information here:
The Top 3 Physician Wellness Tools for 2023, and 4 Reasons You'll Need Them
#2 Create an Action Plan
Once you've made traction on discovering what's holding you back, it's time to remove that roadblock so you can achieve your dream life.
Let's say that time constraints are your most significant roadblock to buying a rental property. Go back to the scenario above. Think of how much time you spend on your phone, aimlessly scrolling through social media. Maybe you veg out on the sofa after work. You can make it a priority to spend at least half of that time devoted to doing things that will get you closer to making your dream a reality.
For this example, you can spend 30 minutes a day learning about investing in real estate. Determine the criteria you want in a rental property and avoid common investing mistakes that newbies make. Find a realtor and property management company. Networking with fellow investors is also a great way to learn the ropes and find deals, such as in our exclusive Facebook group for physicians.
Perhaps you're starting to burn out with your hospital job and want to try your hand at entrepreneurship. Your action steps can include thinking of ideas that interest you and learning how to get started.
More information here:
I Sold My Rental and Changed Jobs to Save Myself
#3 Take Action
Now that you've determined what's keeping you from your dream life and you've decided on a plan, let's get started. Use motivation, along with some self-discipline, to carry out your plan. Hopefully, your action plan and goals will help reignite the ambition that carried you through med school.
We've all heard the phrase, “Knowledge is power.” But the truth is, knowledge is only potential power. Unless we do something with that knowledge to help us progress toward our goals, they're just thoughts in our heads.
Your life isn't going to magically transform without a bit of grit and effort on your part. And it won't happen quickly. Follow this three-step process to making progress today, and you'll be surprised where you'll be in 3-5 years.
And if you're interested in pursuing real estate investing and working with WCI-vetted partners who could help you build wealth, here are some of the best companies in the business.
Featured Real Estate Partners
What does your dream life look like? Have you changed anything in your life to try to get there? What else could you be doing? Comment below!
While not a doctor, I relate extremely well to this discussion. I spent years in my professional (corporate Pharma) world building my education and corporate career. After many grueling years, I’d become frustrated and exhausted by the constant corporate riggers. It’s the same no matter the career: physicians, executives, or otherwise. The exhaustion, the guilt of wasting an education, the fear of tossing away a career, the perceived lack of time and energy is all quite overwhelming. But after a particularly frustrating day, I decided to focus my lunches on reading and researching the purchase of rental real estate. Soon I set a goal to read one hour per night to learn more. Less than two years later, I had an complete business plan built, and I was buying my first building. Within a few more years later, I owned over fifty units. I left the corporate world over six years ago. The guilt, frustrations, exhaustion, and desire for a particular lifestyle design turned out to be the greatest motivators in the world. Looking back, the hard part was the simple step of deciding to utilize my lunches to read. Take the tiny step…and then the next step…and then another…
A life well designed is wonderful, and will be one of the greatest accomplishments you will ever experience.
Of course, that approach does require that somebody view a life involving the purchasing, management, owning of rental real estate as more desirable than the prior life. That certainly is not true for everyone apparently to the amazement of many direct real estate investors.
I’m also curious when people talk about rapidly building a real estate empire (like in your case, 50 doors in just a few years), how much money did you have at the beginning of the period, how much did you add to the portfolio, and how much leverage did you use. For example, I could go out and buy 50 paid off doors next month. But that’s because I’m already wealthy. Somebody who isn’t already wealthy (or doesn’t have massive cash from from a high paying job) who thinks that’s normal might use an inappropriate amount of leverage to get to that same place and end up getting burned. Far better to spend 5 years getting 3 doors and not have it blow up, then go rapidly to 50 doors and then back to zero!
I actually agree with you (…for the most part). I’m going to try and address your questions and points, just a little out of order…
To your question on upfront investment… I started with approximately $200k, which was set aside from regular income savings and bonuses over many years. Hardly a small amount, but certainly not enough to go out and buy 50 units. It was a significant portion of our investments, but less than 15% of our overall net worth at that time. I believe it was a very calculated investment by the time I actually bought our first building, and a far cry from the typical speculation most investors risk on individual stocks that they don’t really follow closely enough. I had a very good idea of ROI, a holding period plan, and a clear exit strategy for every building before we purchased, as well as performance metrics after purchase. (Just for the record, I’m also a low cost index fund investor with a significant portion of our net worth in the stock market, not to sound like I’m knocking the stock market. I love it as an investment class too!)
Yes, it all took time and effort! I created a very specific business plan that outlined purchase decisions from demographics, to building type requirements, to short/medium/longer term ROI requirements, leverage limitations, along with many other documented metrics before taking action. It is NOT a get rich quick scheme. I never espoused it to be.
To your next question, I continued to work my corporate job during those six years of building my portfolio. I “black boxed” our rental business by utilizing property management and maintenance teams, while working during that time. I likely spent 6-10 hours per week during this period on building the rental business outside of my day job. Hardly an unmanageable amount of time for most, if they want meaningful change. I also typically invested every bit of cash flow from the properties back into the next down payment. For me, that was initially around $100-$130 per door per month. And yes, of course I also put additional personal income into those additional down payments. Sometimes that was a few hundred dollars a month from my work income, sometimes it was several thousand dollars a month depending on our personal cashflow situation. We also put every annual bonus into those additional down payments to grow the business. It was never easy or fast, and I never stated it was. It just took action and small steps initially (in a constant direction) to make a huge change on our lives.
To your comment on leverage…Leverage is a fantastic wealth building tool, but like any tool, it can be helpful or incorrectly used. I never leveraged more than 70% of a building as a outlined in our business plan. That may be high for some and relatively conservative to others. It was within my personal risk tolerance.
Fifty units in less than 6 years is very possible and very reasonable, if you use good business practices, make good decisions, and work hard to find good deals. I also experienced an incredible real estate cycle during that period. There are many factors that go into this investment model: good leverage practices, market factors, demographic growth, tax opportunities, personal risk factors just to name a very few. Most won’t make the effort because it sounds too risky or difficult to repeat. Many will become overwhelmed and get analysis paralysis before ever buying a single unit. That may even be true for most, but my point was never that it was easy or quick. It was, that it just takes small specific steps to change your life. Start with reading at lunch, start to research at night, gain a new knowledge, build a plan on your weekends, save the down payments, buy your first property, but take action, even small steps matter. Heck…if your personal risk tolerance allows, build a financial blog! (That seems like WAY more work than buying rental properties to me! Lol!),…to each his (or her) own. Just take action. My path was via rental properties, yours may be through social media websites, someone else’s might be strictly through mutual funds or dividend stocks. Whatever works! This post happened to be focused on investment property, so I chimed in…
As for your initial point, it has been a drastically different lifestyle owning rental properties verses working as in an executive level Pharma role. I would take retiring (slightly early) at 50 owning rental real estate over the former corporate role any day of the week. I’m no longer forced to work 70 hours per week. I only travel when I choose. I no longer manage thousands of employees. I spend my time as I choose, and I spend less than 2-4 hours a month dealing with my rental property manager and reconciling bank accounts. It’s not even close…
I agree being a Pharma executive sounds like a sucky life. I’d take 6 years building a real estate empire and then 4 hours a week managing it over that too. I wouldn’t take it over my current life though.
The rest of your post hints at what could be a spectacular guest post if you’re interested:
https://www.whitecoatinvestor.com/contact/guest-post-policy/
Interestingly, I just looked up apartment buildings in Indianapolis:
https://www.loopnet.com/search/apartment-buildings/indianapolis-in/for-sale/
The first three listings are a total of 65 doors, total asking price $3.25 million. Leveraged up, one could get 65 doors for $1 million.
50 doors is hardly an unreachable goal for most white coat investors, even if most of them will cost more than in Indianapolis.
I’d probably enjoy your lifestyle too!…except you can have the never ending typing! 😉 (It was hard enough responding just a couple of times today!)
(One slight correction on your last comment, it was only 2-4 hours per month {not week} these days…pretty hard to beat!)
I’d might consider a guest post at some point. Email me what you have in mind and we can discuss it further.
It would just be expanding your last comment to include a few more specifics. “How I Built a 50 Door Real Estate Empire over 6 Years in my Spare Time and Freed Myself From Pharma Executive Hell.” That sort of a post.
Sounds like fun. Sure! I’ll give it a shot. I’ll start working on some background, just let me know how to get it to you, format, etc.
Looking forward to seeing it. All the info on how to send it in is on that guest post policy page.
https://www.whitecoatinvestor.com/contact/guest-post-policy/
This would be an interesting listen for sure, and a good general topic – high income corporate earners who don’t love their job (like docs seem to?), who then accomplish diversification and escape.
Lots of real estate ads below the article promoting real estate– it makes me think buyer (investor) beware. Medical practice is hard and there’s always the dream of something easier/better/more lucrative. Maybe real estate is it for some physicians but there’s always someone getting fees.
Careful not to throw the baby out with the bathwater.
Correct; I overwhelmingly agree with most of the most, and have a lot of passive RE investments. A couple of the ones below the post, but mostly others. Keep in mind the ones bloggers “feature” are clearly not always (or even mostly) the best options, for one reason or another. They’re “featured” as they pay ad revenue for the site/post, or sometimes bloggers get a special perk, like an extra .5% return or lower admin fee, etc.
This blogger isn’t getting anything from syndicators/fund managers that his readers isn’t getting.
But it’s not like there is some ranking of “the best” out there. It’s an introduction, not a recommendation, but I pretty clearly tell you what I am actually invested in.
I agree that if one finds any variation on medical practice to be intolerable, then it is important to find another line of work. I would ask whether it is true that there is no version of practicing medicine one could continue to do before bailing out. There are many ways to be a doctor.
It is not at all obvious to me why these posts assume there are only two possible ways to earn money: practice medicine or invest in real estate. There is a whole wide world of other things one can do. As for investing in businesses, there are many businesses other than real estate. Why not fast food franchises? Nail salons? Convenience stores? Auto dealers? The list goes on.
I have asked before but not heard an answer- “Out of all the businesses in which one could invest, what is so special about real estate?”
But for someone who is overwhelmed and burned out by their current job, I am not so sure that spending what little time they have, if any, in learning a completely unrelated career is the best maneuver. How about changing your medical practice? Move to a different employer if you are employed. If you are independent, perhaps set up your practice in a different way or in a different location. Or take an employee job if running the business is driving you crazy.
What’s so special? Particularly good tax benefits and in some forms, much less work. The commenter above is spending 4 hours a month at this “new job” rather than the 280 hours a month he was spending at the old one. Even while building the business he was only doing 28 hours a month.
I echo with the post above. If FI is the goal, why not just dump you hard earned earnings into plain boring index funds and enjoy life/ hobbies rather than picking up a lucrative business that seems like a second job?
Because you can get there faster with that second job.
Yes, but
If someone complains that they are worn out, overwhelmed and burned out I am not sure telling them to get a second job is much of an answer.
Those with the time and energy to do that should first ask whether they can just do more of the same work they already do. More shifts, longer clinic hours, whatever. At least these utilize skills they already have and should hold zero risk of failure.
But if one wanted to have their second job be something completely out of medicine (again, why?), there are many other jobs. Instead of building a real estate business, start a series of franchise outlets, fast food, hardware stores, convenience stores, the list goes on.
In my cynical moments, I suspect the enthusiasm for real estate above all else is driven by advertisers. There is an endless steam of companies offering real estate investments or paid instruction in how to run a business of one’s own. Not nearly so much about “how to build a Burger King franchise business” or “how to invest in a series of bowling alleys”. Both are perfectly legitimate ways to make money but there do not seem to be people selling product, so no advertising.
I also worry about those unhappy docs who are attracted by the lure of easy money. “Make big profits and get rock hard abs in your sleep!”
Like any other business, I assume those who work hard at building and running real estate businesses will do better than those who see it as a way to avoid working.
Unfortunately, I do not know of any data on returns to small private real estate businesses. Does anyone know? What is the distribution of returns? What proportion are still going after 5-10 years?
Did you miss this one?
https://www.whitecoatinvestor.com/non-food-franchising-267/
If you can’t see the advantages of real estate in the tax code and as a combination job/investment, I’m not sure I can help. I just had a chat with someone the other day somewhere that spent 6 years working 6 hours a week building a direct real estate business. When he hit 50 doors, he quit his corporate job and now only spends 2-4 hours a month maintaining that business. Very reproducible. Lots of people in every town can do that. But only one can be the Chick-Fil-A franchisee.