Here at the dojo, being a black belt in finance means to have a net worth of a million dollars. Just like a martial arts dojo, I want Millionaire Dojo to be a place where we can learn about personal finance and eventually become financial black belts ourselves. In this series, we get to hear the stories of actual millionaires and see what it took for them to get to that level.
Today’s featured black belt is a fellow blogger who goes by the name XRAYVSN which is also the name of his blog. XRAYVSN is 48, lives in a low cost of living area in the southeast region of the US and is a physician blogger who writes about his personal finance journey after suffering a very brutal divorce.
If you’re a black belt in personal finance and want to be featured, send me an email.
Now for the interview:
What degree black belt are you? (e.g. one million = first degree, two million = second degree).
I usually don’t factor in my fully paid off home in my “usable net worth” because it is tough to truly determine the value of this asset until I actually sell it and pay the associated fees.
I also don’t include the value of my daughter’s 529 plans as I no longer consider it my asset but hers.
My net worth, without my primary home value and 529 savings, is now closely approaching 3rd degree black belt status (I anticipate getting that 3rd degree sometime this year).
If you throw in the value of my home I am most likely adding another black belt degree on top of that.
Give us the break down on your current net worth. What is it invested in and do you have any debt?
I am completely debt free, having paid off my medical student loans in 2014 and my home mortgage in 2015.
It was truly a liberating experience as I realized I owned “Every Blade of Grass,” on my property.
As for a breakdown of net worth, it is probably easier to have my asset classes represented as percentages of the total pie:
- Retirement Accounts (which include a state pension plan I was part of during residency, my current 401k plan, ROTH IRA, and my Health Savings Account (which I am using as a Stealth IRA) ): 26%
- Brokerage Account: 18%
- Real Estate (Mainly through syndication as well as part ownership in my medical office building): 50%
- The balance (around 6%) is mainly in Emergency Fund/Savings Account combination.
How was your childhood? Was your family wealthy, middle class or low-income?
My father was a physician as well (Internal Medicine), and we definitely were considered upper middle class growing up.
My father passed away when I was 14 years old so I did not really delve into the family finances.
But growing up I never really wanted for anything.
I usually had the latest toys and video games available and my father would often reward me for getting good grades (such as my own 14 ft flat bottom boat with a 10 hp outboard engine).
Did you go to college?
I not only graduated college but followed it up by graduating medical school 4 years later.
What is your fighting style? (Career path from your first dollar ever made to present).
I really never had a job until I went to college.
For some spare spending money, I worked at a local deli as a cashier in college.
Later on, I worked summers doing research both in college and medical school.
My first “real job” money came as a resident.
Back in those days, I believe I started out at around $35k/year which increased with each year of training, topping at about $45k/year.
The big jump in salary came when I graduated from residency and became an attending physician.
Would you recommend people to pursue the same career path? Would you choose a different job if you could go back?
I would say that the world of medicine is changing and it is difficult to see what future generations of doctors will face financially.
Educational costs have spiraled out of control and, to add insult to injury, medical reimbursements have gone down year after year.
At a certain tipping point, the amount of educational debt will no longer justify the ever-decreasing physician salary that comes from it.
I graduated with about $160k of debt but it is not unusual to hear of doctors these days graduating with $400k+ debt, some even hitting 7 figures.
If I had to go back, knowing what I know now and the medical climate I currently practice in, I would do it again.
As a radiologist, I do feel like I am still compensated quite well and it is not a physically strenuous work career.
Have you had any side hustles?
Some of my fellow residents did have side hustles during residency to bring in some money but I really did not do it.
I did have one side hustle that was very easy in that all I had to do was be in the building as a “supervisor” while others would perform procedures, etc.
If you have a spouse, how have they contributed to your net worth?
I was married for 7 years but then went through a brutal divorce that decimated my finances at the time.
I figure I lost over 7 figures of net worth because of her.
But I would divorce her again in a heartbeat because no amount of money was worth putting up with her.
How old were you when you became a financial black belt?
I crossed the 7 figure mark a couple of weeks before my 45th birthday.
At what age did you start seriously saving money?
I was never a real spender in my life but I did not know what to do with the money and thus wasted some opportunities to allow it to grow.
I do feel that going through the divorce and being at the lowest financial point in my life was the catalyst for me to start in earnest the financial journey that I am currently on.
I was about to turn 40 years old and knew that I could not tolerate any more financial mistakes if I was to ever retire, let alone early.
What has been your investment strategy?
I have really been focusing recently on building up passive income, mainly through real estate syndications.
There are a lot of advantages to passive income, the biggest of which is how it is treated under our tax code.
Because of this, passive income provides me with “My Favorite Kind of Money.”
I also max out every retirement vehicle I have available each year (401k, backdoor Roth IRA, and Health Savings Account).
Who was your financial sensei? (Most influential person/source of information in your financial life).
There have been a lot of influences on my investing style.
I had a lot of direction from the Bogleheads (website and books) and the biggest physician blogger in my niche, Jim Dahle, of White Coat Investor, also was a major influence.
Are you pursuing FIRE (financial Independence/retire early)? If so, how much money do you plan to retire on and are you going to quit working for money altogether?
I definitely plan to retire earlier than what those consider traditional retirement age.
My daughter, who is currently 13 years old and finishing up the 8th grade, will enter college when I am 53 years old.
I think that might be a good time to either cut down to part-time work (if not sooner) or stop working altogether.
When I first saw “the financial light,” I thought a $5 million dollar net worth was a good goal to have.
I soon downgraded that amount and instead focused on trying to have an income stream of $125k/year as a better goal.
I think at that level of income I could enjoy a decent retirement life and still take higher-end vacations etc.
Mind over matter
Do you think psychology plays a more important role than math with finances?
For me, it was math, pure and simple.
I know Dave Ramsey touts the Snowball Method where you first attack the lowest balance debt you have even if there are larger balances with higher interest rates.
For me, I did it the logical way and attacked the highest interest debt first regardless of the balance size.
I felt did not need the psychological reward of seeing the number of accounts decrease.
What was your toughest mental opponent on the path to your black belt?
Even though it was an arranged marriage and we were supposed to have “matched” from our religious horoscopes, we were incredibly incompatible on so many levels in including financial ones.
It is important to have a spouse on board and share a common financial goal.
If you have two people with opposite philosophies, you will never make any progress.
I have stated in the past that, no matter how much water you pour into it, you will never be able to fill a colander.
There are a lot more financial white belts than black belts out there. How do you think differently than the average person when it comes to money?
I realized quickly that spending money on materialistic things only brings temporary happiness.
Spending money on experiences has given me the greatest lasting joy.
I still talk about some memorable vacations I have taken 3 or 4 years ago.
I am very fortunate that I have a very high paying income but even more fortunate that I do not succumb to the comparison game or try to be “the Joneses.”
I have used geographic arbitrage as well to truly turbocharge my path to wealth.
What does wealth mean to you? Should everyone pursue it?
Wealth is freedom.
Freedom to do what you want, on your own terms and time frame.
Being wealthy eliminates a lot of anxiety about paying bills or whether you may lose your job in a recession, etc.
Wealth gives you peace of mind.
Should people follow their passions or just do something practical?
I would say ideally doing something you are passionate about will lead to more enthusiasm and decrease your chance of burnout (an epidemic that is starting to raise its ugly head in medicine).
However, your passion project needs to make economic sense and if it does not then there is nothing wrong with going through the more practical pathway.
What is your weapon of choice? (favorite money tool/app)
My favorite money tool is the free online resource provided by Personal Capital.
I use Personal capital quite often to check not only my net worth but also my asset allocation to see if it is deviating from my Investment Policy Statement.
A lot of people think that the Personal Capital website is solely about net worth, but there are so many more uses from this incredibly powerful resource.
What has been your favorite way to earn money?
As mentioned before, my favorite money by far is that money earned through passive income.
The fact that I have a tireless money worker working for me, instead of the other way around, as well as the favored tax treatment, makes passive income the best source of income.
What’s your favorite way to use money?
I think I have gotten to the stage where I value experiences over materialistic things (don’t get me wrong, I like nice things like anyone else but I no longer have to be compelled to buy the latest and greatest tech, car, etc).
I especially love great gastronomical experiences because I truly consider myself a foodie.
When I travel, I often let the local cuisine be the primary reason to visit that region.
What’s your one piece of money advice to us financial underbelts?
Rome was not built in a day and neither will a 7 figure portfolio.
It is disheartening at first, especially if you feel an enormous amount of debt hanging over you, but you have to stay the course.
It would be wise to assess the circumstances of why you got into your particular financial predicament in the first place and address it so that you will not repeat these mistakes in the future.
The financial tide will soon turn if you attack your debt and soon you will be in possession of enough capital to create the phenomenon I call, “The Capital Snowball.”
They say the first “$X” amount is the hardest and subsequent multiples of X come much faster, and I truly have experienced it.
As I mentioned, I hit 7 figures (again not including my primary home or 529s) when I was about to turn 45 years old.
My next million just came 630 days later.
My “3rd degree” is currently on pace to arrive even faster.