By Dr. James M. Dahle, WCI Founder
By Dr. Leif Dahleen of Physician on Fire, WCI Network Partner
A few years ago, The Physician on FIRE and I both became financially independent (FI). We are both 46; he became FI at 39 and I became FI at 42. In some ways, our pathways have diverged since then (he left medicine in 2019 just before turning 44 while I still practice). In other ways, our paths are very similar (we both now get most of our income from what used to be a side hustle). Today, we're going to reflect back on the last 4-7 years since we became FI. Whether you are already FI, already retired, or working toward those goals, we hope you will find this helpful.
How Has Your Attitude Toward Practicing Medicine Changed Since Becoming FI?
WCI
Medicine has gone from being a job to being a well-paid hobby for me. I love to go into the emergency department and see my friends and talk about their families and the last trip they went on. I enjoy going in, sitting down, talking to my patients, and trying to help them find answers to their problems. I enjoy saving an occasional life or doing a needed procedure. I like thinking of myself as a doctor; it is a significant part of my identity. It seems a real waste to me to have spent 11 years in school and training learning how to do something and four years being ordered all over the planet to pay for it just to quit doing it because I don't need the money anymore.
Do I still get annoyed fighting the EMR or when the lab takes forever to do its job? Sure. Are there still plenty of patients who aren't very fun to take care of? Absolutely. But the upsides still dramatically outweigh the downsides for me. However, I'm only going to practice on my terms at this point. When I hit FI, I was working 3/4 time. Afterward, I went to just over half-time, and now I'm at 0.4 FTE working six, eight-hour shifts a month. I work almost exclusively day shifts with an occasional evening shift. I never work after 10 pm. I still do my (now much smaller) share of weekends and holidays, but I'd buy my way out of those if I could. If something particularly onerous were to happen (group lost contract, had to change jobs, multiple lawsuits), maybe I'd just walk away completely. Heck, maybe I'd walk away just due to being annoyed by a new EMR, inadequate staffing, or having to redo a board recertification. However, I'm happy for now to continue working with my friends to help a lot of people in my community who can benefit from my knowledge and skillset.
POF
I did notice a subtle change in my attitude toward work once I realized that the work was completely optional. The small annoyances were things I simply had to live with during the first 10 years of my career.
Nod and smile and place a duplicate order in the computer because that’s what the computer wants. Return the page at 0200 to answer a question that could be better answered by a different specialty and could have waited until morning, anyway. Log in for your annual compliance training, dragging and dropping the cartoonish blood-soaked gauze to the appropriate waste container for the sixth consecutive year.
When you depend on the money the job provides, those frustrating moments are necessary evils. You don’t have much of a choice in the matter. When you reach a point where your investment portfolio is likely to outearn you in any given year, you question why you continue to put up with that nonsense.
Don’t get me wrong; I had many rewarding experiences as an anesthesiologist, and I worked with a lot of great people and cared for some wonderful patients. Still, I always enjoyed my days off more than my workdays and my vacation weeks more than my busy work weeks.
After a nearly two-year trial in which I worked a seven-day workweek each month to better experience life away from the hospital most of the time, I fully retired from medicine in 2019 at the age of 43.
I respect those who continue to work long after reaching financial independence, and in some ways, I envy them. I don’t know if there’s any type of work I’d want to do full-time if I had no need or use for the income it provided. Medicine was an excellent career for me, but I can’t honestly say it was a calling.
Attitude Toward Work After Financial Independence
POF
FI was a surprising revelation to me when I learned about the concept and realized that we basically had it as I was approaching my 40th birthday.
Professionally and psychologically, I wasn’t remotely ready to up and leave my job and career right then and there. I was only about a year into a new job, the best job I’d had in anesthesia and in a community where I was happy to live.
My wife and I talked about what our future could look like if I weren’t working, and we came up with a roughly five-year plan for me to potentially make that exit. Spreadsheets were created, and projections were made. I figured I’d probably have 40-50 years’ worth of expenses saved up by the time those five years were up. Thankfully, the stock market was more than cooperative during that timeframe.
After a year of calculation and contemplation, I started a blog to help spread the message of financial independence to my professional peers. I found that I rather enjoyed using this creative side of my brain, and I’ve been consistently writing and publishing articles at Physician on FIRE for the better part of six years.
You might look at the site and figure that it looks like it takes a lot of work, and you would be right. I don’t call myself a retired person, although the flexibility and freedom I now enjoy in this essentially stressless job I’ve given myself feels a lot like retirement, as compared to the demands of the surgical suite.
I have learned that I like being productive in some way and don’t like to sit idle for long. I may not be working in medicine, but I work on all sorts of things.
That “work” may be planning our first big post-pandemic trip, clearing brush on our wooded property, shuttling our kids from one activity to the next, or writing out my thoughts on work for The White Coat Investor.
The most meaningful shift for me has been the ability to choose what sort of work I do and when. It’s up to me, it’s optional, and it's allowed me time to work on things that benefit me, like the exercise routine and language learning that I’ve done consecutively for hundreds of days now.
WCI
I'm working as hard as I ever did. It is not uncommon for me to put in six hours of work before I go to the hospital or after I come home. Sure, I'm doing less medicine, but an enterprise like WCI, doing work that can be done at any time from anywhere with cell phone coverage, tends to swell to fill the space available to it. In fact, it was primarily the needs of WCI that led to me cutting my shifts at the hospital. I think work is an important part of life, and meaningful work is good for me, my family, and the community around me.
However, I am trying to keep work from interfering with anything else in my life I want to do. At this point, I need good health more than I need money. So, if work were keeping me from exercising, I should drop work. I need solid family relationships more than I need money. So, if work were keeping me from being there when my wife or kids need me, I should drop work. There are a lot of trips I want to go on and activities I enjoy. If work were keeping me from going on them, I should drop work. But as long as I can do everything I want to do while still working, I figure I'll keep working. However, I'm completely unemployable. The list of demands I would have for any possible future employer (32 weeks vacation, set my own schedule, work from home, etc.) would be so ridiculous that no one would ever hire me.
Do You Invest Any Differently Now That You're Financially Independent?
WCI
Not really. It's a little easier to hit the minimum investments for private real estate investments while maintaining diversification than it used to be. But that's about it. The majority of my portfolio is still a few boring index funds/ETFs like VTI, VXUS, VBR, and VSS.
POF
That’s a great question, and if you had asked me a few years ago, I would say that not much has changed other than the account balances being a bit larger than they used to be.
However, I’ve found that my appetite for risk has actually increased. Dr. William Bernstein’s oft-quoted, “If you’ve won the game, stop playing,” is one school of thought that suggests it’s wise to dial down the risk once you’re financially independent and invest more conservatively. Now, I wouldn’t subject the roughly 30x expenses necessary to maintain FI to unnecessary risk. I’ve got that and then some invested in index funds, holding stocks and bonds.
With some of the overage—that is, money beyond what we need to be considered financially independent—I’ve invested in a mix of real estate deals and startups. The largest among those is an investment in Republic.co, a platform for investing in other startups, more mature pre-IPO companies, and cryptoassets. I’ve since made several investments on the platform.
I’ve previously hypothesized that my life wouldn’t look a whole lot different if we were to have a lot more money. If some of these alternative investments pan out, I may have the opportunity to put that theory to the test. My guess is that the hypothesis would be proven wrong, to some extent.
Do You Spend Any Differently Than You Used To?
POF
A decade ago, I had no use for a nose and ear hair trimmer, and now I’m on my second one. So there’s that. I’ve also got boys that are aging out of the kids’ menu, making dining out a more expensive endeavor.
As far as our overall spending habits, the frugal tendencies that my wife and I have thrived on for decades are hard habits to break. And if it ain’t broke, why fix it?
That being said, I can also see the folly of our frugal ways in certain circ*mstances in which it makes good sense to pay for convenience or quality rather than save a buck. We can’t take those bucks with us, so I’m trying to put them to use in instances where I might have taken the cheap route in the past.
I’ve toyed with some mental math to alter the psychology of spending. I figure our net worth is at least 10x what it was a decade ago. Relative to our nest egg, things now cost 90% less than they did 10 years ago—maybe 85% when accounting for inflation. That makes parting with money much less painful.
Of course, if I spent 10x more than I used to, our nest egg would be depleted in well under a decade. A better approach may be to use the 4% rule of thumb to determine what we can afford.
If we have 50x to 60x as much as we spend in a typical year, I know that we could double our spending and still have a relatively safe withdrawal rate. That also makes it easier to spend money I might not have a decade ago.
WCI
For sure, we spend differently. In fact, by any reasonable standard, the average American would say that we spend with wild abandon. When you know you have already taken care of business (student loans gone, mortgage paid off, kids' college funds full, retirement paid for, home renovation complete, boat and cars paid for) but you are still generating income, you can pretty much do whatever you want with it guilt-free. We basically buy whatever we want. Our budget process has little to do with budgeting and everything to do with cash-flow planning. We only need to know what we spent last month so we can calculate how much to save or give away this month. So that's basically what the process is.
Now we haven't bought a NetJets subscription and we're not into bottle service, but when we do buy stuff, we buy nice stuff. If there is a trip we want to go on, we don't worry about how we're going to pay for it. We just pay for it. We have house cleaners now, but we are also both working and, frankly, both hate to clean. It feels like a pretty luxurious life to us, but our life is honestly pretty affordable on just about any physician's salary. Imagine what you could do with your salary if you didn't have to save for retirement or make any payments. That's what our spending life is like.
How Has Your Perspective on Giving and Legacy Changed Since FI?
WCI
Mo' money, mo' problems here. We're religious people, and so we feel God will hold us accountable for how we manage what we possess now and will possess in the future. As Jesus Christ noted after giving the Parable of the Steward,
For unto whomsoever much is given, of him shall be much required
We have always been givers, but now we give away a multiple of what we spend every year. The recipient might be family or friends, it might be a local charity, or it might be a charity operating on the other side of the planet. We want our money to do good while we are still living and to go on doing good long after we are gone. We have used a Donor Advised Fund (DAF) to anonymize and facilitate the giving, and we are even contemplating putting a private charitable foundation in place. It'll never be the Bill and Melinda Gates Foundation, but we want to do what we can. We also involve our children in the giving process and expect that to continue as they move into adulthood. We are also preparing them to manage inheritances properly. We're with Warren Buffett in that we want to give them enough that they can do anything they want, but not so much that they can do nothing. They will be getting a “test inheritance” in the form of a UTMA when they leave home (“the 20s fund“), and how they do with that will likely affect how and how much they inherit later.
POF
I lived in Florida during my anesthesia residency, and more than a few hurricanes impacted the state while I was there. I remember seeing a plea from the Red Cross asking for help with disaster relief.I didn’t have much time to give, and I didn’t have much money, either. Still, I went to the website and donated $50, and that felt pretty good.
I would continue to give where I thought I could make a difference, and in 2013, my wife and I started our first donor-advised fund, donating a bunch of suboptimal mutual funds that were not terribly tax-efficient. Before retiring from medicine, I made it a goal to have 10% of our desired nest egg in donor-advised funds.
We continue to give to and from our DAFs with Vanguard Charitable and Fidelity Charitable. Dr. Dahle and I use the accounts differently. He uses it largely as a pass-through account, whereas I think of ours as more of an endowment—a source of funds that will allow us to give generously for decades, regardless of our future income or lack thereof.
In terms of legacy, it’s my expectation, or at least my hope, that our children will be financially independent on their own long before our last will and testament is read. I like Warren Buffett’s plan to leave his heirs enough money to be able to do anything but not enough to do nothing. Anything more would likely be given to charity, and I’d prefer to give most of that while we’re among the living.
What Advice Do You Have for Those Working Toward FI, Both with and Without the Retire Early (RE) Component?
POF
Mind the gap. Any combination of earning more or spending less that grows the gap between money in and money out will allow you to reach financial independence more quickly.
Just be sure to continue to do things that make you happy throughout your FI journey. It has been estimated that about 10% of your happiness can be attributed to life circ*mstances. In other words, while FI is amazing and a laudable goal, don’t expect to be more than about 10% happier once you’ve achieved it.
Last, if you love your job and, therefore, have no interest in obtaining financial freedom, you ought to reconsider. Your job won’t love you back, and it will very likely look a lot different five, 10, or 20 years from now.
Even if your job remains consistent and rewarding, you will change, as will your priorities. Financial independence is the insurance plan that protects you as your relationship with your career evolves.
WCI
There is no dramatic change that occurs the instant you hit “your number” and become FI. All the benefits of FI come gradually as you approach your number and continue even once you have hit it. I still think FI is a worthwhile goal, but the person you become while you work toward the goal is probably more important than actually hitting it. If you find yourself working solely to get to FI, you probably just need a new job and may even want to spend some time thinking about your career. Dr. Dike Drummond advises people to draw a Venn Diagram of their current life and their ideal life and then work so those two lives overlap as much as possible. I did that a few years ago and it has made all the difference. I don't have complete overlap yet, but I'm getting pretty darn close.
What do you think? If you are FI, how would you answer these questions? If you are not FI, does any of the above surprise you? Comment below!
