My Plan to become a Multi-Millionaire Barista/Surf Instructor/Deadbeat

[surfguy84]

Alright people hear me out (and feel free to criticize as indicated).

I'm finishing residency and have an inpatient job lined up at a busy hospital where I will do my own billing (using a biller). In discussions with administration it's my understanding their payors are generally paying in the 140-160 range for the most common inpatient billing code of 99232. New intakes are paying 250-300. For simplicity let's call it 150 and 275. I can dictate my own patient cap and am interested in a cap of 24. They are also at an average of 92% capacity. So let's say I'm doing 22 patients with 1-2 being new intakes. That comes out to ~$3500 a day.

3500 x rounding 6 days a week = 21k a week. Work 48 weeks a year and I've now made 1 million. After taxes, etc I'll be left with 625k. I live on 100k a year, I save 525k x 4 years and I now have 2.6M in the bank with interest accumulation. I cut wayyyyy back and do a few days of telepsych or a weekend inpatient coverage a month, just enough to generate 150k/yr. All the while I let the money continue to grow. I get to pursue my dream of running a little coffee shop, surfing, and generally living a hedonistic existence.

At historical returns (accounting for inflation mind you) I should have just about 5M in 9 more years, when I'll be getting to the end of my 40s. If I can hold on until my mid 50s the money should grow to 7ish million.

Essentially, I'm seriously considering working myself hard these first four years out of residency, making the most money possible, then doing the bare professional minimum while pursuing hobbies and leisure. Shoot me straight, how unrealistic am I being?

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[dl2dp2]

The numbers are a little bit too optimistic but we can take a 20% haircut and your math doesn't change much. Let's call it between 600-800k total pre-tax 1099 income. You can save 350-400k a year. If you work 5 instead of 4 years you'll have 2.3M in the bank.

Something like that I think is realistic.

I suspect this is not only realistic but happens at some frequency, which is why in theory most physicians should be multimillionaires in their 50s, and many are. However, in practice, spending 100k a year for 5 years in your 40s is TOUGH. Do you have children? Do you care where they go to school? Do you want to spend any time with them?

By my estimation, if you want your kids go to a school that's rated 8/9+ ANYWHERE in the country, your overall cost yearly will exceed 100k. It used to be only coasts and you can find some deals in secondary cities and Midwest, but after COVID and fed's loose monetary policy, a reasonable family home in a top school zone will start around 1M. So, this will eat more than 50% of your 100k budget already.

That's assuming you round on 24 inpatients every day, day in day out, counting your days for 4-5 years. This is rough and might get you sued, but it's not wildly unrealistic. Nevertheless, in my mind, ideally, you want a job that: 1. makes money; 2. is sustainable/has growth potential; 3. is interesting; 4. not too much work. This job only meets 1. There are jobs out there that meet all 4.

 

[surfguy84]

The numbers are a little bit too optimistic but we can take a 20% haircut and your math doesn't change much. Let's call it between 600-800k total pre-tax 1099 income. You can save 350-400k a year. If you work 5 instead of 4 years you'll have 2.3M in the bank.

Something like that I think is realistic.

I suspect this is not only realistic but happens at some frequency, which is why in theory most physicians should be multimillionaires in their 50s. However, in practice, spending 100k a year for 5 years in your 40s is TOUGH. Do you have children? Do you care where they go to school? Do you want to spend any time with them?

That's assuming you round on 24 inpatients every day, day in day out, counting your days for 4-5 years. This is rough and might get you sued, but it's not wildly unrealistic.

Is it that hard though? 100k a year post tax dollars is like 150k/year salary. Most of America lives on half of this. I do have a child and a wife who also works. She would continue working during these 5 years and earns about 90k a year, but I left her salary out of this for discussion sake.

That said, I am curious why you think my numbers are too optimistic. I've talked to another doc at this hospital who uses the same biller and he collects like >95% of the time. He's apparently very good at what he does. So if collections isn't the issue, what do you think would result in 20-40% less revenue?

 

[ObsequiousAplomb]

Is it that hard though? 100k a year post tax dollars is like 150k/year salary. Most of America lives on half of this. I do have a child and a wife who also works. She would continue working during these 5 years and earns about 90k a year, but I left her salary out of this for discussion sake.

That said, I am curious why you think my numbers are too optimistic. I've talked to another doc at this hospital who uses the same biller and he collects like >95% of the time. He's apparently very good at what he does. So if collections isn't the issue, what do you think would result in 20-40% less revenue?

one of those factors may be that collecting 95% of the time doesn't mean 95% of collections. I imagine those 5% are disproportionately the patients who are there longer than typical and heavy users of the resources. A single patient staying for 30 days waiting on a state hospital bed when insurance stops covering after day 5 would take away at least $3k. Sometimes people wait 90 days or more for a state hospital bed. Sometimes you have more than one. Sometimes the census isn't full. 92% average means that it will sometimes be lower than 92%*95% collected, which is 87%. 22 follow-ups and 12 intakes is really 100% capacity, not 92%. Assuming 92% capacity but that same ratio of payments would mean $3,045, not $3,500.

Sometimes people say 95% collections but then they mean something like "we take receipt of 95% of what we collect" - makes absolutely no sense but I've seen many people try to weasel out of the 95% claim that way. Sometimes they collect all the insurance but none of the patient's responsibility but count that bill as collected. They really mean 70-80% of billings are collected and paid in full.

You're also using the median payments to extrapolate when they might not be evenly distributed. A range of 140-160 might mean that out of 10 payers 7 pay less than 150, 1 pays 160, and 2 pay 150. There's also the distribution of those payers and your census. Even if 5/10 pay 160 and 5/10 pay 140, you might end up with more than half of your census being the lower payers.

Your wife's salary does make living off of 100k post-tax sound a little better, but her income is less than 10% of your income if you really are bringing in a million+.

$1million might not be 625k after taxes. I've plugged a few locations into this and found that's not really the case. I haven't seen one as high as 625k in the areas I've looked, which are mostly good places to live in the midwest but I did include some dodgy areas. Free Income Tax Calculator - Estimate Your Taxes - SmartAsset.

There's a lot more variables that could add up here, but at the risk of ranting I'll hold off because I'm sure others will list them better than I could. I know I certainly would never work 6 days a week at this pace for 48 weeks a year irrespective of pay.

 

[forchinet121]

I am doubtful you will be paid 150 and 275 for a follow up and new patient eval without any psychotherapy codes on average but if it does work out let us know

 

[SmallBird]

Ugh this is like every second thread now. Nothing new here.

 

[surfguy84]

one of those factors may be that collecting 95% of the time doesn't mean 95% of collections. I imagine those 5% are disproportionately the patients who are there longer than typical and heavy users of the resources. A single patient staying for 30 days waiting on a state hospital bed when insurance stops covering after day 5 would take away at least $3k. Sometimes people wait 90 days or more for a state hospital bed. Sometimes you have more than one. Sometimes the census isn't full. 92% average means that it will sometimes be lower than 92%*95% collected, which is 87%. 22 follow-ups and 12 intakes is really 100% capacity, not 92%. Assuming 92% capacity but that same ratio of payments would mean $3,045, not $3,500.

Sometimes people say 95% collections but then they mean something like "we take receipt of 95% of what we collect" - makes absolutely no sense but I've seen many people try to weasel out of the 95% claim that way. Sometimes they collect all the insurance but none of the patient's responsibility but count that bill as collected. They really mean 70-80% of billings are collected and paid in full.

You're also using the median payments to extrapolate when they might not be evenly distributed. A range of 140-160 might mean that out of 10 payers 7 pay less than 150, 1 pays 160, and 2 pay 150. There's also the distribution of those payers and your census. Even if 5/10 pay 160 and 5/10 pay 140, you might end up with more than half of your census being the lower payers.

Your wife's salary does make living off of 100k post-tax sound a little better, but her income is less than 10% of your income if you really are bringing in a million+.

$1million might not be 625k after taxes. I've plugged a few locations into this and found that's not really the case. I haven't seen one as high as 625k in the areas I've looked, which are mostly good places to live in the midwest but I did include some dodgy areas. Free Income Tax Calculator - Estimate Your Taxes - SmartAsset.

There's a lot more variables that could add up here, but at the risk of ranting I'll hold off because I'm sure others will list them better than I could. I know I certainly would never work 6 days a week at this pace for 48 weeks a year irrespective of pay.

Maxing out 401k or ira for s corp owner and employee spouse is 114k pre-tax right there, ample business deductions will get you pretty close to 625 in CA. I used smart asset but they don't allow you to increase 401k deductions that high so just play around a little to get the true take home on their site.

 

[surfguy84]

Ugh this is like every second thread now. Nothing new here.

I'd love to talk about some cool pharmacologic mechanism or therapeutic theory too. Go right ahead and make a thread and I'd happily contribute. I did enjoy the conversation in your inpatient neuro thread, though I did not contribute there. Perhaps I should have.

 

[Crayola227]

Why you would want to own and run a coffee shop and be a barista is totally beyond me. It's like you've been watching too many Friends episodes or something.

Owning a small business, especially in service, especially food, is actually a ton of work and not low key at all.

Do you have experience doing either (owning a small business or food service?) Because this reads like someone who hasn't. Potential to lose a lot of money which would also set back your plans.

 

[ObsequiousAplomb]

Maxing out 401k or ira for s corp owner and employee spouse is 114k pre-tax right there, ample business deductions will get you pretty close to 625 in CA. I used smart asset but they don't allow you to increase 401k deductions that high so just play around a little to get the true take home on their site.

If you put it in a 401k you will save plenty on taxes. It will be a great idea to do that. It does mean that is money not accessible for the early part of your plan (though I obviously am not saying anything against putting that money in a 401k, just that it's not the same pool of money as described in the original post).

I think that doing the bare minimum professionally for the years after your 40s is very reasonable. I don't think it requires working this hard during your 40s.

 

[Crayola227]

I just kind of checked in with some small business owners I know with experience with food industry and coffee in Maui, specifically.

If you are buying into an already established successful business, and everything has already been set up, that helps enormously.

Getting any small business off the ground is a ton of initial time and money investment and things WILL go wrong, and you can work through that sometimes and other times you can't. Nature of the beast.

So just as long as you are aware of this and up for a challenge, that's a different story. Being aware it's a challenge and some luck is involved, it's not just a retirement deadbeat activity.

I just hesitate whenever someone seems to think small business ownership is a hobby. A hobby is a hobby. Small business ownership is not.

 

[surfguy84]

Why you would want to own and run a coffee shop and be a barista is totally beyond me. It's like you've been watching too many Friends episodes or something.

Owning a small business, especially in service, especially food, is actually a ton of work and not low key at all.

Do you have experience doing either (owning a small business or food service?) Because this reads like someone who hasn't. Potential to lose a lot of money which would also set back your plans.

Have owned a small business, have not owned a food service business. Honestly, I'd be happy being employed at someone elses cafe, or maybe buy in as a partner. The barista thing is not to make a bunch of money. I'm just truly insane about coffee, dialing in pour overs, talking about different beans, etc. Its the kind of thing I would do if money were no object.

 

[psychmd03]

Alright people hear me out (and feel free to criticize as indicated).

I'm finishing residency and have an inpatient job lined up at a busy hospital where I will do my own billing (using a biller). In discussions with administration it's my understanding their payors are generally paying in the 140-160 range for the most common inpatient billing code of 99232. New intakes are paying 250-300. For simplicity let's call it 150 and 275. I can dictate my own patient cap and am interested in a cap of 24. They are also at an average of 92% capacity. So let's say I'm doing 22 patients with 1-2 being new intakes. That comes out to ~$3500 a day.

3500 x rounding 6 days a week = 21k a week. Work 48 weeks a year and I've now made 1 million. After taxes, etc I'll be left with 625k. I live on 100k a year, I save 525k x 4 years and I now have 2.6M in the bank with interest accumulation. I cut wayyyyy back and do a few days of telepsych or a weekend inpatient coverage a month, just enough to generate 150k/yr. All the while I let the money continue to grow. I get to pursue my dream of running a little coffee shop, surfing, and generally living a hedonistic existence.

At historical returns (accounting for inflation mind you) I should have just about 5M in 9 more years, when I'll be getting to the end of my 40s. If I can hold on until my mid 50s the money should grow to 7ish million.

Essentially, I'm seriously considering working myself hard these first four years out of residency, making the most money possible, then doing the bare professional minimum while pursuing hobbies and leisure. Shoot me straight, how unrealistic am I being?

Wow what area of the US are you? and I am assuming those are private insurer numbers. Even private by me do not pay those numbers without having a 90833 code with your 99232.

And a 95% collection rate is pretty good. Will you hold billing at the start of the year for few month for deductibles to max? What about the companies that will audit or do pre paying audit of charts? They are quite nasty about finding even the smallest reason to take it back and even when you talk to them they cant even explain why they arent paying.

Running numbers more conservative just seems smarter. But the path you are on is basically what I have personally done though I actually work more and will work at that high volume longer. And I will say a small family maintaining on 100k doesnt sound very fun to me personally. I would rather work a bit more to enjoy a bit more. Sure many in the US get through with less but you have the positioning to easily make up more than that. I would rather be able to go to some fine dining once a month. Out to eat and drinks each weekend. Some decently large vacations (only 1-2 since I am not good at taking any days off) especially in the future.

 

[Monocles]

Alright people hear me out (and feel free to criticize as indicated).

I'm finishing residency and have an inpatient job lined up at a busy hospital where I will do my own billing (using a biller). In discussions with administration it's my understanding their payors are generally paying in the 140-160 range for the most common inpatient billing code of 99232. New intakes are paying 250-300. For simplicity let's call it 150 and 275. I can dictate my own patient cap and am interested in a cap of 24. They are also at an average of 92% capacity. So let's say I'm doing 22 patients with 1-2 being new intakes. That comes out to ~$3500 a day.

3500 x rounding 6 days a week = 21k a week. Work 48 weeks a year and I've now made 1 million. After taxes, etc I'll be left with 625k. I live on 100k a year, I save 525k x 4 years and I now have 2.6M in the bank with interest accumulation. I cut wayyyyy back and do a few days of telepsych or a weekend inpatient coverage a month, just enough to generate 150k/yr. All the while I let the money continue to grow. I get to pursue my dream of running a little coffee shop, surfing, and generally living a hedonistic existence.

At historical returns (accounting for inflation mind you) I should have just about 5M in 9 more years, when I'll be getting to the end of my 40s. If I can hold on until my mid 50s the money should grow to 7ish million.

Essentially, I'm seriously considering working myself hard these first four years out of residency, making the most money possible, then doing the bare professional minimum while pursuing hobbies and leisure. Shoot me straight, how unrealistic am I being?

Your principle is sound. I am basically doing the same thing you are, except downscaling (with a much chiller job, a fraction of your salary and net worth goal).

Do you know about SWR? If you're interested go read up on "the trinity study" and it basically explains how you can live off your investments almost indefinitely.

There's an entire group of people (in medicine and out) dedicated to the idea of FIRE (financial independence, retire early). Look up "physicians on FIRE" and there's thousands of docs trying to do the same.

 

[Crayola227]

Yeah I knew someone who worked like this, and they just got to where they paid off their loans and they dropped dead, leaving a young child. Maybe the money would be more of a comfort to your family than quality time. I imagine it's possible to have a balance like someone else suggested.

 

[finalpsychyear]

I say go for it. I had a similar option out of residency but due to being at a different point in life where i was needing time to establish my personal life i was not willing to work like this 6 days a week. You already have a wife and child. The docs at the facility i was looking at were getting in about 5-6am and out by 1-2pm on average having 24 patient caps. Most eventually got their own NP to make it more lifestyle friendly and eventually moved on 4-5 years after doing this. Some had a second job after rounding on 24 pts lol. They also had some stipend for being directors and some perks with the facility plus call coverage money. I am sure your rates are higher being in cali but I would shave 20 percent off your theoretical numbers to sandbag it mentally and if you beat it then it will be a big plus instead of feeling disappointed.

You should clearly do this job if your ok with the 6 days a week. Pick up an NP at some point maybe you can increase your cap to 30 and you eventually split the patients and the extra patients pay off the NP and make it more lifestyle friendly and you can alternate the Saturdays between both of you eventually to make it more doable.

Good luck and keep us updated.

P.S. I think spending 120-140 between both you and your wife should be ok. Cutting that extra 20-40k and working that hard and making that much not worth it imo.

 

[SmallBird]

Yeah I knew someone who worked like this, and they just got to where they paid off their loans and they dropped dead, leaving a young child. Maybe the money would be more of a comfort to your family than quality time. I imagine it's possible to have a balance like someone else suggested.

I don't think that fear of sudden death is a good reason to do or not do anything.

 

[ObsequiousAplomb]

I don't think that fear of sudden death is a good reason to do or not do anything.

I agree. Sudden death doesn't make the balance any better. Family will almost always prefer the quality time over the money. Not suddenly dying means you get to be there experiencing more quality time while still being exceptionally well off financially. Persistently working half, a third, or a quarter of this job will still be enough financially. You'd probably enjoy working twice, three times, or four times as many years at that pace. Then you wouldn't have to deal with the stress of leaving a career early.

 

[TheRightMedication]

I don't think that fear of sudden death is a good reason to do or not do anything.

Respectfully, you are wrong.

Memento Mori.

Memento mori - Wikipedia

en.wikipedia.org

 

[Crayola227]

I don't think that fear of sudden death is a good reason to do or not do anything.

I'm saying that working 6 days a week for 10 years (residency plus 5 years post residency) AND even considering how to add even more work to that on the day off, may not lead to the "payoff" people sometimes think it will.

Beyond a certain amount of money, children don't care about that, they care about your time.

But I get it, that doesn't factor into some people's planning. They tell themselves they'll just spend the time later. But it is good to keep in mind later doesn't always come.

I have a friend who last year lost their 7 year old to cancer.

You don't have to plan things like everyone is gonna die, but maybe it matters to take that day off and make some ****ing pancakes and go to the park.

I find the people that resist this notion the most, are basically addicted to money or work, and they want to go on thinking it's OK to just work and not spend time with their loved ones, like they'll always be there.

This is just, the height of ridiculous magical thinking about anyone, let alone children who grow up and have their own lives, or one's own parents. I already have a parent in the grave. Really glad I made the time even during med school to see them before they passed.

 

[surfguy84]

I'm saying that working 6 days a week for 10 years (residency plus 5 years post residency) AND even considering how to add even more work to that on the day off, may not lead to the "payoff" people sometimes think it will.

Beyond a certain amount of money, children don't care about that, they care about your time.

But I get it, that doesn't factor into some people's planning. They tell themselves they'll just spend the time later. But it is good to keep in mind later doesn't always come.

I have a friend who last year lost their 7 year old to cancer.

You don't have to plan things like everyone is gonna die, but maybe it matters to take that day off and make some ****ing pancakes and go to the park.

I find the people that resist this notion the most, are basically addicted to money or work, and they want to go on thinking it's OK to just work and not spend time with their loved ones, like they'll always be there.

This is just, the height of ridiculous magical thinking about anyone, let alone children who grow up and have their own lives, or one's own parents. I already have a parent in the grave. Really glad I made the time even during med school to see them before they passed.

You make some good points. But I'm talking about working hard for 4 more years so that I essentially never have to work again.

This isn't a decade long plan to generate millions of dollars. Just four more years and I'm out forever. Seems like a good trade off in my mind, despite the fact I could drop dead at any time.

 

[surfguy84]

Respectfully, you are wrong.

Memento Mori.

Memento mori - Wikipedia

en.wikipedia.org

The dalai lama would like a word.

 

[dl2dp2]

You make some good points. But I'm talking about working hard for 4 more years so that I essentially never have to work again.

This isn't a decade long plan to generate millions of dollars. Just four more years and I'm out forever. Seems like a good trade off in my mind, despite the fact I could drop dead at any time.

Except 2.5 million is not really enough to "never have to work again". It's only enough to provide a fairly basic standard of living if you never work again which I think once you get there you'll come to realize that you need to continue to work so you can live a richer life.

The quantity of money we are talking about here, to me, is not optimal in the types of choices you are electing. And it's certainly not optimal in terms of taxation. If you say okay if you work 65 hours a week and you can guarantee 10M at the end of 4 years, then I say okay yeah that's totally worth it. If you say I can work 35 hours a week and have 1.5 million, and 65 hours a week and have 2.5 million, I'd say, meehhh...

 

[surfguy84]

Except 2.5 million is not really enough to "never have to work again". It's only enough to provide a fairly basic standard of living if you never work again which I think once you get there you'll come to realize that you need to continue to work so you can live a richer life.

The quantity of money we are talking about here, to me, is not optimal in the types of choices you are electing. And it's certainly not optimal in terms of taxation. If you say okay if you work 65 hours a week and you can guarantee 10M at the end of 4 years, then I say okay yeah that's totally worth it. If you say I can work 35 hours a week and have 1.5 million, and 65 hours a week and have 2.5 million, I'd say, meehhh...

This is true. In a literal sense, no I would have to still work while that money grew. I would continue working for 9 more years after my 4 years of hard work. But I'm talking about working one weekend + maybe 20 hours of telepsych a month. True I'm not completely retired, but I'm getting like 24-25 days off a month. Isn't this essentially the same thing?

Edit: just on my calculations based on moonlighting during residency, one weekend of inpatient coverage and 20 hours of telepsych a month with an insurance based group practice, I should generate ~12 a month. So just about 150k a yr . Not bad for all that free time.

 

[dl2dp2]

This is true. In a literal sense, no I would have to still work while that money grew. I would continue working for 9 more years after my 4 years of hard work. But I'm talking about working one weekend + maybe 20 hours of telepsych a month. True I'm not completely retired, but I'm getting like 24-25 days off a month. Isn't this essentially the same thing?

Edit: just on my calculations based on moonlighting during residency, one weekend of inpatient coverage and 20 hours of telepsych a month with an insurance based group practice, I should generate ~12 a month. So just about 150k a yr . Not bad for all that free time.

Sure. You can semi retire at 45 and fully retire at 50 then sit on the beach for 30 years. I’m bored just listening to your life story. Not particularly extraordinary in any way and not fundamentally different from someone who works half as much and retires at 60. I just don’t find that set of choices to be meaningful enough to make a conceptual difference.

 

[surfguy84]

Sure. You can semi retire at 45 and fully retire at 50 then sit on the beach for 30 years. I’m bored just listening to your life story. Not particularly extraordinary in any way and not fundamentally different from someone who works half as much and retires at 60. I just don’t find that set of choices to be meaningful enough to make a conceptual difference.

lol I'm pained to hear my life story isn't extraordinary to you. Getting to surf most days of the week, engaging in hobbies, and traveling with all the free time I'll have is pretty amazing to me.

 

[BiscoDisco]

Sure. You can semi retire at 45 and fully retire at 50 then sit on the beach for 30 years. I’m bored just listening to your life story. Not particularly extraordinary in any way and not fundamentally different from someone who works half as much and retires at 60. I just don’t find that set of choices to be meaningful enough to make a conceptual difference.

As a fellow surfer, there are some things other people just don't get about it. It appears you are one of them. Its more than a hobby, it's a lifestyle for some. Being able to fully embrace this lifestyle without extraneous things like work getting in the way is the pinnacle for many.

I am curious though, if you had 90% free time what would be your life direction to create that meaningful and extraordinary life story?

 

[Orgone]

Sure. You can semi retire at 45 and fully retire at 50 then sit on the beach for 30 years. I’m bored just listening to your life story. Not particularly extraordinary in any way and not fundamentally different from someone who works half as much and retires at 60. I just don’t find that set of choices to be meaningful enough to make a conceptual difference.

He's Surf Guy, he's not sitting on the beach, he's out catching waves. Surfing very easily becomes an all consuming passion, in some ways it can function more like an addiction in many people's lives, I've seen it many times. Actually maybe I should start marketing a surfing addiction practice.

It is true that the fantasy of retired "sitting on the beach" life often disappoints those who achieve it. I did it myself for a bit, as a temporary experiment, and found that I wanted more structure and work in my life and would rather work 10-15 hours week than completely retire. Which is actually fantastic, because it means that I don't have to save up 10M before I can live the life I want.

It is a lovely thing that as physicians, and at the moment as psychiatrists in particular, we have the luxury of being able to ramp up or down our work hours and reimbursement as we please. I maintain that this is one of the more underappreciated benefits of our profession compared to tech, finance, law.

If surf guy gets tired of cutbacks and barrels he can always go back to work more.

 

[psychmd03]

Except 2.5 million is not really enough to "never have to work again". It's only enough to provide a fairly basic standard of living if you never work again which I think once you get there you'll come to realize that you need to continue to work so you can live a richer life.

The quantity of money we are talking about here, to me, is not optimal in the types of choices you are electing. And it's certainly not optimal in terms of taxation. If you say okay if you work 65 hours a week and you can guarantee 10M at the end of 4 years, then I say okay yeah that's totally worth it. If you say I can work 35 hours a week and have 1.5 million, and 65 hours a week and have 2.5 million, I'd say, meehhh...

Fully agreed 2.5mil won’t get you much of anywhere especially with a family and ever wanting to travel or enjoy food etc. A goal that sustains a better lifestyle is shoot for at least 5 mil and taper back to 100-150k a year income maybe 200-250 since that is pretty easy to obtain while not over working at all especially on a 1099 income with someone that is semi efficient. That way you can travel to Asia or Europe with your family or a nice ski resort for a few weeks or what ever. And go take your SO out for some good food a few times a month rather 1-2x a year.

As to the second paragraph the bette option imo is to learn to be more efficient with work so your income per hour goes up rather than increasing work hours. Find an easy med director on the side that requires little time investment as well. Those seem overly abundant in our profession.

 

[smalltownpsych]

Why spend 4 years of your life not surfing? Also, maybe you should set up an espresso bar at a cash only private practice. The coffee bar is a popular feature at my place. Not quite the same standard that you would want, but could be a thing.

 

[dl2dp2]

I am curious though, if you had 90% free time what would be your life direction to create that meaningful and extraordinary life story?

This is to be worked out. Also this is opportunity dependent. You can’t really plan your life story—you can only be curious and pursue things that work and interest you.

He's Surf Guy, he's not sitting on the beach, he's out catching waves. Surfing very easily becomes an all consuming passion, in some ways it can function more like an addiction in many people's lives, I've seen it many times. Actually maybe I should start marketing a surfing addiction practice.

Makes sense. Still I think fundamentally the argument against this type of life is philosophical. Many physicians and work till 50 and retire. So then the next question is so what. There’s nothing wrong with it. And the numbers work out. I don’t think there’s anything unacceptable from a personal finance perspective—it’s a personal value thing. If I had 5 million dollars at 20 would I just go surf for 50 years and then the end? I mean, to me at least you need to struggle a little bit even if that is the final decision you make. These are relevant far reaching questions that go beyond what’s the safe withdrawal rate and how many 90322s can I bill on Medicare rates to make 1M a year.

I do a different kind of psychiatry and see people with 10M at 50 and their kids, and the way in which peoples fear of mortality and existence might affect their psyche and behavior. And it’s not at all necessarily rainbow and unicorn. So a rational plan ought to have that type of intentionality in mind.

 

[Monocles]

Except 2.5 million is not really enough to "never have to work again". It's only enough to provide a fairly basic standard of living if you never work again which I think once you get there you'll come to realize that you need to continue to work so you can live a richer life.

The quantity of money we are talking about here, to me, is not optimal in the types of choices you are electing. And it's certainly not optimal in terms of taxation. If you say okay if you work 65 hours a week and you can guarantee 10M at the end of 4 years, then I say okay yeah that's totally worth it. If you say I can work 35 hours a week and have 1.5 million, and 65 hours a week and have 2.5 million, I'd say, meehhh...

Fully agreed 2.5mil won’t get you much of anywhere especially with a family and ever wanting to travel or enjoy food etc. A goal that sustains a better lifestyle is shoot for at least 5 mil and taper back to 100-150k a year income maybe 200-250 since that is pretty easy to obtain while not over working at all especially on a 1099 income with someone that is semi efficient. That way you can travel to Asia or Europe with your family or a nice ski resort for a few weeks or what ever. And go take your SO out for some good food a few times a month rather 1-2x a year.

As to the second paragraph the bette option imo is to learn to be more efficient with work so your income per hour goes up rather than increasing work hours. Find an easy med director on the side that requires little time investment as well. Those seem overly abundant in our profession.

I think what everyone forgets here is that even in retirement, that initial nest egg of $2.5M will continue to grow. The idea is withdrawing 3-4% and living off of it and letting the rest of the market growth compound on itself.

Assuming OP retires at age 40 with 2.5m and withdraws 4% which comes out to 100k to spend during his first year, a statistical projection of his finances will look something like this.

Meaning that by age 50 (10 years into retirement) - his NW will be between $2-8 million, withdrawing $96-372k annually
By age 60 (20 years into retirement) - NW between $3-22 million, withdrawing $138-951k annually
By age 70 (30 years into retirement) - NW between $5-53 million, withdrawing $207k-2.2M annually

Not a bad life considering OP hasn't worked a single day past age 40.

The true question OP should be asking is which charities/foundations he wants to leave his money to.

 

[calvnandhobbs68]

I think what everyone forgets here is that even in retirement, that initial nest egg of $2.5M will continue to grow. The idea is withdrawing 3-4% and living off of it and letting the rest of the market growth compound on itself.

Assuming OP retires at age 40 with 2.5m and withdraws 4% which comes out to 100k to spend during his first year, a statistical projection of his finances will look something like this.

View attachment 359410

Meaning that by age 50 (10 years into retirement) - his NW will be between $2-8 million, withdrawing $96-372k annually
By age 60 (20 years into retirement) - NW between $3-22 million, withdrawing $138-951k annually
By age 70 (30 years into retirement) - NW between $5-53 million, withdrawing $207k-2.2M annually

Not a bad life considering OP hasn't worked a single day past age 40.

The true question OP should be asking is which charities/foundations he wants to leave his money to.

Correct, and if OP decides to still work part time a couple days a week, his drawdown will be even less. People seem to forget that single digit percentages of a large number are another large number.

 

[Stagg737]

Couple thoughts:

1. Burnout. Self-explanatory but maybe not as bad since OP is only looking to do that for a couple of years. Also, you must have a very low-maintenance family to think they'd be good with you working what sounds like at least a 12-hr per day (if you want to provide even decent care) job 6 days a week. Idk how old your kid is, but unless they'll already be a teenager you'd likely be missing out on some prime years of their life. Also, if you're pulling in over a million/yr, are they really okay with living "meagerly" when you're bringing in all that income?

2. Idk what kind of jobs you're looking at, but the following isn't something I've seen anywhere: "I can dictate my own patient cap and am interested in a cap of 24. They are also at an average of 92% capacity. So let's say I'm doing 22 patients with 1-2 being new intakes." 24 patients a day with only 1-2 intakes? So average LOS is 20 days? Maybe on a geri-psych unit, but I'd be interested to see a position where this was actually happening.

3. I also agree you're very optimistic about reimbursement in that setup. Aplomb made some good points, to add to them you're also counting on being reimbursed for the vast majority of those days. Most patients don't legitimately "require" 20 days on an inpatient unit and insurance/CMS knows that, even when patients do require longer stays be prepared for lots of doc-to-docs to (try to) justify it. With the setup you describe I'd imagine there'd be a much lower rate of collection than the >90% you predicted which will drastically drop your gross collections.

4. You're donating an awful lot of your income to the gov with this setup: "I've now made 1 million. After taxes, etc I'll be left with 625k." I'll attach a Physician on FIRE article for some general numbers, but why bust your butt so hard to only keep ~60-65% of your income? Yes, more money invested earlier means a bigger nest egg, but how badly do you need to be able to "retire" in 5 years vs having a much more manageable job, living a bit more frugally, and "retiring" in 10 years? Maybe you've already run those scenarios, but it seems silly to me to be miserable for 5 years to retire instead of just not enjoying work so much but having plenty of time to enrich your life outside of work which is easily done in psychiatry.

Your plan isn't totally unreasonable, but doesn't sound totally thought out and sounds like it will inevitably compromise the quality of patient care. It also honestly sounds like it's not a very efficient financial setup and that you're not considering other ventures that could help you reach your financial goals without giving so much money away.

Article: Taxes on a Million Dollars of Earned Income - Physician on FIRE

 

[Stagg737]

Correct, and if OP decides to still work part time a couple days a week, his drawdown will be even less. People seem to forget that single digit percentages of a large number are another large number.

Yep, ran a basic calculation and with a nest egg of $2.5M OP could withdraw $10-12k/mo infinitely without even considering supplemental income in the formula. It just completely depends on how much OP is going to need per month to live comfortably once he's done.

 

[Crayola227]

Sure. You can semi retire at 45 and fully retire at 50 then sit on the beach for 30 years. I’m bored just listening to your life story. Not particularly extraordinary in any way and not fundamentally different from someone who works half as much and retires at 60. I just don’t find that set of choices to be meaningful enough to make a conceptual difference.

Right? And the QOL and amount of time you get with your young family is so substantially different.

That's a big reason to work more slowly until 60 rather than basically not watch your child grow up.

My friend's kid, his best little buddy, like, they were still bedsharing, he turned 12 and just dropped dad like a hot potato out of nowhere, for like no reason. People think they've got their kids until 18 but the reality is that as soon as the teen years hit they've got one foot out the door, and they become more like a resentful roommate than anything. They take you for granted. Makes sense kids think you'll always be there, from their perspective that’s always been true. But parents have perspective and should know better.

I've never met a child whose parent didn't *have* to work that much and be gone all the time to make ends meet that EVER said "thanks for never being home, Dad." It's a given Dad cares more about money than he does you. There might be enough surface peace to think they aren't hurt by this, but they are.

Wish I could find the post and the article I once found that eloquently explained that, humans, children, are wired that time = love and there is no substitute.

I could understand this if it was just this couple, no kids. My partner when it was just us was working more hours than OP describes. We told ourselves we had later and we tried to make up for time with dinner at 9 pm and the weekend day off. But then we had the baby, and it's like, "if you are not home by X time then you are just not relly a part of her life" and we had to make changes to prioritize that to the work schedule.

Meanwhile friend's 12 yo dropped him, and dude went back to working 80 hours a week.

For the money OP describes the trade off isn't worth it imo.

The old adage, no one on their deathbed ever wishes they had just worked more.

 

[dl2dp2]

My friend's kid, his best little buddy, like, they were still bedsharing, he turned 12 and just dropped dad like a hot potato out of nowhere, for like no reason.

Meanwhile friend's 12 yo dropped him, and dude went back to working 80 hours a week.

For the money OP describes the trade off isn't worth it imo.

Nothing is ever "for no reason". I see the dads for a living. Sometimes I see the sons (years later).

And perhaps it's at least justifiable if you are working 80 hours a week. It'd even be inspirational if you are super duper excited about your work and it's of some importance and your family might understand. Imagine you tell your kid that you'd rather surf 80 hours a week because ... well, you enjoy it more than anything else, and that 1. you have millions in the bank but you don't want to spend it; 2. instead of working you'd rather sit there. Who wouldn't drop that kind of dad like a bag of hot potatoes? Choices have consequences. Boundaries exist for a reason.

And I'm not saying that any of this is "right" or "wrong". There's no singular model that would sustain fulfillment for everyone. My point is simply that one ought to think of the reality of the situation in a stark way and truly evaluate the consequences.

 

[TheRightMedication]

I am in strong agreement with Crayola and Stagg and others above.

The proposal to miss out on years of your children's life and stress yourself out, at 60-70% efficiency due to progressive taxation ... all in service of ... having fun someday?

I am flummoxed as to what philosophy could possibly be behind this.

 

[twospadz]

I believe in balance. Currently working per diem psych ER job making 47k a month working half the month. The other half of the month, I'm in South east asia. I'm single male with no kids. 31 yo.

 

[Monocles]

I believe in balance. Currently working per diem psych ER job making 47k a month working half the month. The other half of the month, I'm in South east asia. I'm single male with no kids. 31 yo.

Now this guy is rocking it.

@twospadz are you willing to share some tips about how to get a gig like this??

 

[forchinet121]

Now this guy is rocking it.

@twospadz are you willing to share some tips about how to get a gig like this??

That’s not a remarkable gig he’s probably working very long hours with high liability risk with an unpleasant population

 

[dl2dp2]

I believe in balance. Currently working per diem psych ER job making 47k a month working half the month. The other half of the month, I'm in South east asia. I'm single male with no kids. 31 yo.

Which country and what level of consumption you do there? (i.e. how much do you pay for rent/food)?

 

[Candidate2017]

Essentially, I'm seriously considering working myself hard these first four years out of residency, making the most money possible, then doing the bare professional minimum while pursuing hobbies and leisure. Shoot me straight, how unrealistic am I being?

Not unrealistic. In psychiatry, like all of medicine, you can earn more simply by working more. I looked at a similar job, seeing 20+ patients, and it pays at least double the average depending on amount of patients and amount of weekend call. The grind wasn't for me though.

 

[Stagg737]

That’s not a remarkable gig he’s probably working very long hours with high liability risk with an unpleasant population

If he's making $47k per 15 days that's pretty impressive at ~$3k/day unless he's basically just doing churn and burn seeing 10+ patients per day. I'm also interested in hearing more about that set up.

 

[forchinet121]

If he's making $47k per 15 days that's pretty impressive at ~$3k/day unless he's basically just doing churn and burn seeing 10+ patients per day. I'm also interested in hearing more about that set up.

It’s psych ER..they pay you 250/hr for 12+ hour shifts

 

[Stagg737]

It’s psych ER..they pay you 250/hr for 12+ hour shifts

Missed the psych part of psych ER, but as you describe sounds like a basic burn and churn volume position even if it's an hourly rate.

 

[finalpsychyear]

Yep, ran a basic calculation and with a nest egg of $2.5M OP could withdraw $10-12k/mo infinitely without even considering supplemental income in the formula. It just completely depends on how much OP is going to need per month to live comfortably once he's done.

2.5m nest egg gets crudded on too much nowadays... at some point that 100-120k yearly being used for mortgage/cars will all be eventually paid off and the kid will be done with school. My rent is 2400 and i have 2 cars costing 1500 total per month and easily stay under 120k without trying granted its just me and my wife for now.

 

[psychmd03]

I believe in balance. Currently working per diem psych ER job making 47k a month working half the month. The other half of the month, I'm in South east asia. I'm single male with no kids. 31 yo.

Jeezes this sounds great. Basically my goal after I have my nest egg set (by 36) it should be sizable enough to work 1-2wk a month and let it grow and that will cover expenses and then some and get traveling. I’m also lucky my SO has no desire for children.

 

[psychmd03]

Missed the psych part of psych ER, but as you describe sounds like a basic burn and churn volume position even if it's an hourly rate.

Why is that necessarily burn out? Some work better in a sprint and coast mentality. Personally I work better that way. When I used to be on call in residency I wouldn’t sit down or eat or socialize until all calls and notes were done. Then I’d coast. Taking a test I’ll knock out boards in 3 hours no breaks then leave. So why not just smash all work together then coast and travel or what ever. Burn out to me would be doing that for 20 days a month or more.

 

[twospadz]

Which country and what level of consumption you do there? (i.e. how much do you pay for rent/food)?

Thailand. I have a 5 year Elite visa so I can travel whenever I want to.