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When I first started this blog, on my 47th birthday (April 23, 2018) I was overly ambitious and let two posts go live:
- “A Journey Of A Thousand Miles Begins With A Single Step”
- This first post was my introduction to the world that I entered the blogosphere and described how difficult it was for me to break inertia and get out of my comfort zone.
- “I Have Pretty Much Made Every Mistake In The Book…”
- First off I apologize for the strange background color (even for me). For some reason this is the only post that I must have done something that made the background different from every other post I have since written (and I can’t seem to correct it despite my best efforts).
- This post started off a 5 part series that culminated in how much money I estimated I lost cumulatively from these mistakes (quite a staggering amount).
- I wanted to start of my blog by baring my soul and revealing these mistakes because too often I see only blogs speak of their successes but not the failures they had to first endure to get there.
A decade ago, just a month shy of turning 40, I could honestly say I was at the lowest point emotionally and financially, having just survived a brutal 13 month long divorce.
I do not have exact numbers because my financials were not as organized as they are today, but I estimated that I had a net worth of negative $850k during this time period before I became financially woke.
I knew at the the time that even with a physician’s income I could ill-afford to make any more mistakes if I planned on retiring at all, let alone early.
Having just turned 50 and essentially hitting every financial milestone I wanted to hit when I first started my FIRE financial journey I can now reflect on the past and reveal some of the events that, either by luck or by skill, allowed me to climb my way out of the financial pit I started in and ascend to the financial summit where I currently stand.
Financial Blessing 1: I got accepted into medical school and then later a radiology residency.
Although the medical profession for me has lost some of its luster recently, I still am greatly indebted towards the profession.
If I could achieve similar financial success, my dream job would be a musician/rock star.
Unfortunately I judge myself as only an above-average talent playing the guitar/singing so I knew early on this path would never provide financial stability for me.
The medical profession therefore became my de facto first choice for an occupation.
Radiology in particular is a specialty that pays very well, with radiologists typically listed in the top 5 of medical earners in various surveys.
I do not think I would have been able to dig myself out of the financial trouble I was in after my divorce finalized in 2011 so quickly if not for my income as a physician.
This physician’s income gave me a big enough shovel to dig with that I quickly became debt free a week before my 44th birthday.
Financial Blessing 2: Taking advantage of Geoarbitrage.
I have previously extolled the virtues of Geoarbitrage.
I wish I could say that I had planned moving to my current location because I knew of the financial benefits I would get from Geoarbitrage but to be honest I do not think I even heard of the term when I purchased my forever home in 2005.
I went from a state that had high state and city income taxes to one without, easily adding a mid 5 figure tax savings each year to my bottom line.
Although sales tax were higher in my current state, I would have to purchase over 7 figures worth of goods each year just to breakeven with my income tax savings.
One of the greatest benefits of living where I do was the very low cost of living.
The biggest of the “Big 3” financial expenses is the cost of one’s home.
Before I reveal how much I paid for my home, I would love to see what you think I paid for it (in 2005).
As a refresher about my personal “Shangri La” please refer to my “I Owe My Accelerated Path To Financial Independence To A Leap Of Faith….And Ebay?!?!?,” where you can see representative photos of the property.
Pertinent property info:
- 7.67 acres of land
- 3150 ft square foot 2 level 3 bedroom 2.5 bath home
- 50 ft and 8 ft natural waterfalls fed by a spring creek
(note when I purchased the property there was no guest house, no composite decking or outdoor lighting).
So what do you think the agreed purchase price was?
Check out what I paid for the property here.
(please comment below about what you thought it was worth and also what you thought after finding out what I paid for it in the reveal).
It is not uncommon for physicians to spend 7 figures (or a multiple of 7 figures) on their doctor’s home.
The fact that I was not one of them helped me attack my mortgage at a lightning pace and with laser focus which turbocharged my path to wealth.
I also did not have to deal with 5 figure annual property taxes that these more expensive properties carried with them, giving me more positive household cashflow.
Financial Blessing 3: Recognizing the importance of lifestyle over salary early on.
As mentioned in the home price reveal link, I ended up having 5 radiologist job offers to choose from after buying my home.
Three of the 5 were eliminated in fairly quick succession due to being at the upper limits of how far I wanted to travel from home.
The remaining 2 offered a reasonable commute time and well run radiology practices which I could easily step into without issue.
One of the practices offered a salary that was over $100k more than the other.
No brainer right?
Well I ended up going with the lower paying opportunity.
I ended up chosing my current practice (now on my 15th year) because it was the one opportunity out of them all that offered no nights or weekend clinical duties.
I prioritized lifestyle over money even in my mid 30s and to this day I am glad I did.
And the money I supposedly gave up by taking the lower paying offer?
In the end I think I may have made more money with this better lifestyle practice than if I had gone with any of the other opportunities, especially when you factor in my grand slam investment of investing in the ground floor of my medical building, an opportunity I would have missed out on elsewhere.
It is funny how things have a way of working out that way.
Financial Blessing 4: Getting A Divorce
“You know why divorces are so expensive?
Because they’re worth it.” -Henny Youngman
In part 4 of my “I have pretty much made every mistake in the book” post I calculated that the legal fees, child support, alimony, and assets awarded to my wife came to around $850k.
As painful as it was to lose that amount of net worth, the alternative I fear would have been even worse: staying married.
I liken my ex-wife to an anchor, a financial and emotional one.
Whereas I never bought into creating a financial facade to show that we were a physician family, she fully embraced lifestyle inflation and doing things for show.
She hated using coupons at the checkout feeling it was beneath her to use them and that they were for poor people only (I use them all the time even now).
For her name was worth more than substance.
It is hard to be in a relationship where one is a spendthrift and one is a saver.
It is hard to make any financial headway in this situation.
I have previously used the analogy that a colander can never be filled no matter how much water you pour into it and it applies perfectly when describing my marriage (as evidenced by the negative $850k net worth at the time).
I can almost guarantee that if I had stayed married I would have a net worth nowhere near the amount I have now (and it would not shock me if you told me it was under 7 figures at the age of 50).
That was the path I originally started on, but fortunately it was not the one I was destined to remain on.
The divorce set in motion a chain of events that led to my financial awakening and it was something I am glad I did, no matter how painful it was at the time.
Financial Blessing 5: Seeking help.
One of the great things about being brought to my financial knees after the divorce was that it opened my eyes to my financial predicament for the first time.
Picking up your life after 40 is not an easy task and I knew I could not do it on my own.
I decided I needed to up my financial educational game because I really did not like learning finance from the school of hard knocks.
I quickly discovered great financial resources like White Coat Investor and the Bogleheads which then encouraged me to read as much as I could about finance.
There was a period where Amazon was delivering me a new financial book almost every other week which I would quickly devour the information and was hungry for more.
For the first time I had a focus of what I wanted money coming into the house to accomplish.
Before that money coming in, no matter the amount, had no defined purpose and did nothing to improve my net worth.
I became laser focused and attacked my debt.
With the power of my income concentrated on debt that enemy was quickly slayed.
This created even more positive cashflow into my house and I had to decide what I wanted to do with it.
I decided I wanted my money to work for me, rather than the other way around.
Thus I transformed my previous debt snowball method into a capital snowball and boy did that quickly grow in size.
Financial Blessing 6: Starting this blog.
In medical training there is a mantra, “See one. Do one. Teach one.”
The premise of this is that for one to really comfortable doing a procedure you first have to observe, then do, and finally pass that knowledge to the next person by teaching.
While each step solidifies the procedure into your wheelhouse, none is more important than the teaching one.
If you are able to successfully teach the procedure to a medical student or resident then you truly feel like you have mastered it.
Writing this blog has actually elevated the standard I hold myself to when it comes to finance.
Admitting mistakes as well as discussing triumphs really drives the financial points into my consciousness.
Also being a member of the physician blogging community has opened up relationships I would not have had otherwise and allowed me to pick other brains when I am contemplating a personal financial move.
I have made many mistakes in my life, culminating in a negative $850k net worth about to turn 40.
Fortunately I did not throw in the towel and instead dug deep down to try and better my situation.
The subsequent things I have done right in my life have more than compensated for the mistakes made early on.
I hope my story shows that you can still financially redeem yourself even in later stages of life.
If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”
Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
NOTE: The website XRAYVSN contains affiliate links and thus receives compensation whenever a purchase through these links is made (at no further cost to you). As an Amazon Associate I earn from qualifying purchases. Although these proceeds help keep this site going they do not have any bearing on the reviews of any products I endorse which are from my own honest experiences. Thank you- XRAYVSN
Great stuff Doc, and it’s always good to count your blessings in life. That’s an amazing turnaround. Gratitude goes a long way.. and thanks for the mention!
Thanks Dave. It still is hard to believe the magnitude and how relatively quickly the turnaround was. Lot of things fell in place nicely for me
Judging by how you introduced your property price, I thought you spent just $200k for it. $500k is still a monstrous steal for what you bought, so that’s still good.
Great financial decisions. What’s even better is that those financial decisions paid off.
Lol. Yeah I would have truly stolen it at 200k. But coming from Ohio I was shocked at what I could get for $500k here. I know this property in California would be several million at least
You’ve done so well having endured much misfortune. However you come across as a positive optimistic person. No doubt that helped carry you from a low place to a great life. And two waterfalls! That’s as good as it gets.
I appreciate you taking the time to say that. I definitely am now in a good place and have a positive outlook. Going through the divorce was another thing but fortunately was able to put that behind me.
Thanks again and have a great day!
Great article and congrats on the turn-around! I really like the “See one. Do one. Teach one.” mantra. Thanks for sharing.
Appreciate you stopping by and commenting. Yeah I did a complete 180 financially and emotionally and in such a better place now. Have a great day
Always a good thing when one can look at life’s challenges and frame them as learning opportunities for both overcoming adversity and offering gratitude. Your lens for looking at the world has clearly had a huge impact on how you’ve successfully navigated the bitter moments. And I agree, being a member of this small and nerdy club is a wonderful benefit!
Thanks CD! Falling forward still allows you to make some progress on the path to your life goals. Although as I have gotten older it is getting harder each to get up figuratively and literally