A Wrinkle In Physician FI

Categories Personal Finance

I am almost 50 years old this year. I have two children who are early on in their university education. I have noticed a slight discomfort recently that I did not see coming until I started to experience it. It is this realization that my children might not do as well financially as we have. It really began when I ran the numbers on my son’s possible path to FI. He might be coming out and earning 50K a year. That would be a pittance for most physicians. I needed to sit there with these numbers and be reminded of how much money I am leaving on the table by not working maximally.

We tend to think about money too often in these buckets that tend not to interact. What many in the FI community fail to see is that the accumulation is relatively simple. It is the interplay between all the moving parts that complicate things. It is complex enough with thinking about all this within my own financial planning. But when you add in the moving parts of your adult children’s lives, then it really gets interesting.

Perhaps for some of you whose children are very young, you dismiss the idea since you are still focused on how to deal with their growing needs. I see many worry about the need for private schools, sports camps and worrying about “spoiling” them. I have gone beyond all of that without much fanfare. It has been relatively easy for me and I am immensely thankful for that.

How Did I Do It?

I did not believe in private school for my children. I am a firm believer that if a student is motivated and hard working, spending more money on their education before post secondary studies is not worth it. I recently attended the high school graduation of my youngest daughter. The drive and the excellence of her classmates in a Canadian public high school were highly rewarded. No amount of private school would have made much difference for many of them. Money can not buy many things in life and I am glad that this was illustrated once again.

The issue of spoiling my children was never a problem. I simply did not make money a central tenet to a life well lived. They have watched first hand how I consistently pared down tasks such that it was more work to call someone to do it than to just do it myself. It is all in the design of most things. I spend much more time thinking than doing. I have shown them to equate a simple life with joy and peace. Money is only used to transact things we can not easily do for ourselves. But it quickly decouples when one uses money to solve too many of one’s life problems. I never held money as a goal for them, nor did I use it as a punishment for them. I never valued money in Gollum- like terms as “my precious” since I really see money as a tool.

The Wrinkles I Did Not Foresee

My youngest daughter has developed this unrelenting interest in becoming a physician. My husband and I have never told either of our children what they should pursue as a career. But knowing your child well has been invaluable. This one should pursue it.

And this is the other wrinkle. I have found her energy contagious for renewing my own interest in returning to my career. I absolutely did not see that coming. I was planning to work more when she went to university. I never thought my daughter wanting to pursue Medicine would make me want to work with renewed vigor. She has in her innocent admiration of a career in Medicine reminded me of the wealth I already held in my hands.

So those were a couple of odd wrinkles. One has been recognizing that my son may be a lower wage earner and how to set him up. The other, is how to deal with a child who wants to do what you have accomplished without getting them focused on the downsides of the career. It is a balancing act.

I have been FI for over a decade. I also have a physician spouse and children. All these factors impact FI more than a number. There are plenty of moving parts when you take it all into consideration. I can not plan without including all the needs of my family.

This is one of the reasons I continue to make comments to many physician blogging sites especially the younger ones. Do not be so quick to pull the medicine rug out from under your feet. Many of us do not see the pitfalls until we are blindsided by them. Please consider keeping your licenses active. I do not pretend to know anyone else’s situation but I can state for myself that I am grateful that I have always kept my options open.

FI is about options. But all options begin in your mind. And some options can not be purchased with money. If you can set it up properly, the road to FI will likely be easier and not such a maddeningly, blind rush. It reminds me once again that most times it isn’t about the money.

18 thoughts on “A Wrinkle In Physician FI

  1. Many of my colleagues send their kids to private school at $25k+/yr. Is it worth it?

    Speaking from the point of view of the GTA, if you live in a decent/affluent neighbourhood, then the public schools are just as good (or better) than the majority of the private schools out there. Many private schools inflate their students’ marks. I’ve heard from university professors that a 90+% in public school holds greater weight than a 90+% mark in private school

    However, there are a few private schools that stand out (such as UTS in Toronto), but those are the exception. Even so, I know colleagues who went to schools like UTS, but after all those years of expensive tuition, they ended up in the same med schools/residencies as us lowly public school students.

    I agree with your recommendation to other physician FIRE bloggers who are contemplating about giving up medicine entirely after reaching a certain FI number. Don’t! Keep your license active just in case.

    Just today, I heard from my friend who’s daughter just graduated from high school. Her school’s top graduating student achieved a 98% overall average, and still did not get into the coveted McMaster Health Sciences program (supposedly a true “Pre-Med” undergrad program). Reminds me of how lucky I am to be in my position where so many students are striving to achieve.

    1. Hi DN!

      I don’t think I would have been able to do the applications. I could barely get references for my own work/ school when I needed to! Like heck I’m gonna do it to get my kids into Kindergarten!!!

      A reasonable school can not quell a driven student. Thank goodness that is still the case in our Canadian public schools. Sad would be the day if that ever changes. But for any young parents who are wondering- it still works in Canada. If you put your head down and work hard in high school, it appears you will still go where you want to go academically.

      I am glad you are working part time DN especially with the summer upon us.

  2. As usual, Dr MB, you make me rethink my plans (in the best of ways!). The certifications for maintaining licensure have grown so tedious that I’d looked forward to ignoring the next round of maintenance tests and chucking the whole business in a decade. Now I’ll have to reconsider.

    Curious how you plan to help your son.

    Fondly,

    CD

    1. Hey CD!!

      We cancelled my husband’s disability insurance and I am essentially his disability insurance. Probably much like you and your wife.

      I plan to aggressively start saving for both our kids in our accounts similar to your ROTH. As I have discussed with Gasem, our kids will have the decades of growth that we all do not have. The small amounts will grow very large over time. I am putting it into a Vanguard fund of funds which will not even require rebalancing. Plus none of this will impact their future work, future pensions, etc. Our family certainly plans as a entire unit. It also will help him that he can continue living in one of the Multifamily units ongoing. I started some of these plans years ago. I am always on the look out for good ideas.

    2. I think giving your kids an expensive lifestyle might be harmful. But to pull all this off he will have to stay the course with the investments long term and live within his means. I am training him in the behavioural financial aspects which are more important.

  3. Very thought provoking post as usual. I am like Crispy Doc in the fact that one of the joys I perceive of getting FIREd is no longer having to jump through the ever increasing hoops to maintain my medical license. Practice Quality Improvements, MOCs, etc are getting tiresome.

    I send my daughter to private school but it is because I have chosen to live in a bit of a rural area and figure the geographic arbitrage savings I have benefited from offset the private tuition costs.

    My daughter too has expressed a desire to go into medicine (she’s only 12 though). I actually have a post scheduled later in the fall that elaborates on my feelings on this.

    1. Hey XRV!

      You can afford to send your daughter to private school and have weighed the costs. It is only sad the ones who blindly believe that sending their kids to private school guarantees some special access to universities etc. Thankfully in Canada, it most certainly does not. The universities seem very aware of which schools grade accurately and which schools simply pad their students’ marks. Some universities have run statistics and have shown that the students from certain private schools have consistently performed significantly worse than the public high school students.

      I will be very interested to read your post about your daughter and her interest in Medicine. Don’t burst her precious bubble. We need to at least give our kids a chance to try it for themselves. Maybe just build a safety net with a ROTH and your own knowledge of the pitfalls of money and Medicine and she will be fine no matter what she chooses.

  4. Hi MB. Thanks for this thoughtful post. Your “How I Do It?” provides a great blueprint for how my wife and I would like to raise our children. Just like you, we also don’t think that the costs of private school are worth it. Fortunately for us, we live in an area with an excellent school district. Plus my wife and I both went to public schools and I think we turned out more than just fine.

    It is interesting to think that my children may grow up to not make as much money as I do. I am okay with this as long as they are happy, kind to others, and learn to live within their means. Hopefully my wife and I can lead by example, much like how you did for your children.

    1. Hey Dr. McF!

      Thankfully we have experienced thus far that it is more about the student than which school they went to. I am actually saving my money for when or if they require higher educational assistance in the future. What if they can not get into professional programs close to home and need to move away? We have only started this journey with our kids at this stage.

      And yeah, when I see that my son could make 1/10-1/20th of what we currently make, it makes me pause BIG TIME.

      Until my children are solidly launched, I may have to activate myself to full time as needed. I do not delude myself otherwise. That’s why I harp about many of the docs NOT give up their license completely. We only need to work like 2 months a year to keep ours active. Not sure what horrors they make you guys do in the US.

      It sounds like your lifestyle is more of your choosing. You are not following the typical doc lifestyle. You are going to show your daughter a different way and that’s exciting Dr. McF.

  5. Hey Dr. MB,

    I have also been contemplating these issues. I think my kids will be in a similar boat to yours financially, but they are still young so who knows. They will likely be heading off to University when I am about your age. Even though FI, I also decided not to retire from medicine until at my kids at least finish highschool. I enjoy medicine (now that I am balancing it a bit better) and want to make sure that I model for my kids what it looks like to work hard at a career you get satisfaction from. There is plenty of negative cultural energy around “working” sometimes that I want to counter. Working is going to be a reality for them that they will need to develop a healthy relationship with it. I sometimes wonder what the impact will be on the second generation FIRE families who permanently retire when their kids are very young. I can also see that if one of my kids does look like they will choose medicine that it would be a major draw for me to stay involved.
    -LD

    1. Happy Canada Day LD!!!

      I am hanging out with my hubby who is on call all weekend. Life of doctors….

      I think it would be very awkward to not work when your kids are striving to get a foothold! That’s one of the main reasons I am getting my butt back to work so that my kids see that working isn’t so bad. Working isn’t bad!! I just preferred some control and I couldn’t duplicate myself so one of us needed to mind the house/ kids.

      We really want our kids to find careers they will enjoy doing. They don’t have to love it but they need to be able to see themselves doing it long term if need be. I want them to see it more as their way to give back to their communities. They can adjust their work as needed for young families, stress levels, other opportunities etc.

      Well I am glad that I am not the only person who worries about this stuff…..

      1. So LD,

        I asked my husband if he would retire after this whole weekend of call? He made a good point that right now his career feels pretty good. He thinks it would be harder to stop and build all that momentum back up. Especially when one deals with technical specialties. I think that unconscious competence might start reverting back to conscious incompetence quickly. That’s why I am starting to think part time work is likely better for us all.

  6. I’m convinced the future will be nothing like the past in terms of work. Systems are being developed which will simply do it better and cheaper and the systems will not be human. Medicine is no different. I recently read about a project what taught cell phones to be able to determine skin cancer diagnosis. The ability outstripped Stanford dermatologists. I see the same for many aspects of medicine as AI techniques become definitive. In addition medicine is being encroached by providers. I read an article on doximetry by a guy with 40 letters behind his name including DNP. The article called into question the safety of anesthesia assistants while extolling the safety of CRNA’s. It was a clear hit job trying to discredit and eliminate the competition. There is no reason to believe MD anesthesiologist aren’t next. Trucking will soon enough be completely robotized. Can a radiology tech with an AI do as well as a radiologist?

    My solution to education was home schooling. My kid at age 2 was signing and had an 80 word vocabulary befor she said her first word so no way was I sending her into the mediocrity of public education. We chose a classic great books education and she graduated at age 7 with 2 years of college under her belt. She chose music and just graduated cum laude (meaning she didn’t just screw around) and got a job working for a 500 student Montessori school. Her goal is to become a choir director. It turns out choir is the largest past time in the US he also has a photography business and does weddings an such. So at 21 she’s got it going on but is not headed to my level of wealth. I’m on her accounts and can track her spending. She is totally responsible with her spending and always has been. Therefore there isn’t anything more I can ask of her. She developed her talents applied herself diligently and is responsible and serious about her life. My other kid is similar she is also a photographer but still in school figuring out her life. She is just where she should be also. What they have in common is the economy in the future is going to be a gig economy. Right now they are doing gigs. Medicine is even moving that direction.

    My solution for my kids is to let them live their lives but to set them up. I have excess money, enough to insure their security but not their luxury. 42% of adults have less than 10K saved for retirement. Somebody working for a Montessori school will be in a similar boat, but my ki will not be in that boat. I look at the purchase of a retirement portfolio as a purchase of future security based on the magic of compounding, and lack of debt. So those are my goals, helping my kids purchase a portfolio early enough to maximize compounding and helping with debt management. My kid graduated debt free. That was my goal for her beginning when she came to my family. She graduated with some money in the bank and a good car. That came from the magic of compounding. I put 20K into a UGTM in all stocks and let it ride for 20 years. It tripled. From that I paid college incidentals like summer abroad etc. Also a car and enough in the bank to get an apartment. 2/3 of that nest egg was interest, so for every buck she spent I paid 33 cents. I’m going to do the same with purchasing a retirement portfolio for her. She going to have to make her own way doing what she’s passionate about. That’s her business. Deciding to give her a secure future is my business. It’s the state of reality today. What happened in the past is irrelevant. They will also be the enefactors of our estate, but who knows what passing an estate means 40 years hence. So my decision is to pass a little of the ownership now before the government decides the money belongs to them and not to her. If I can fund a Roth, 40 years of 5.5K/yr is 1M bucks. As our deaths come into view my need for a massive retirement fund recedes so I will accelerate wealth transfer. I figure if each of them has 2M in their possession when they are 60 regardless of the state of estates taxes etc and the preceding 40 years of their lives their security will be assured.

    1. Anyone who cares about their children should really read and re-read your comment/ post Gasem. There are so many layers of experience there. Too many of the FI bloggers think it’s some number to just tap out from. Are they kidding themselves?!!!

      Reaching the number is straightforward. It is the planning and adjusting that makes or breaks how it really works out for you and your loved ones. It is a long journey with much needed vigilance and adjustments.

      I have been researching this and our TFSA will do the trick (much as your ROTH) for my children.

      If I had the temperament, I would have home schooled my kids. My philosophy was slightly different. I figured they better get used to dealing with life as it comes. And I could only be supportive with whatever “life/ school” threw at them.

      Your daughters are very fortunate to have had parents such as you and your wife. I will also plan to set mine up. As you said before, we can afford to. And it won’t take a gargantuan amount if we start it early for them. I view it as family planning in the truest sense of the word.

    1. Haha! But that is because you obviously have many other skillz DocG! I (gulp) kinda miss Medicine….

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