I ONLY WOKE UP TO the notion of financial independence at age 50. I’d been asleep at the financial wheel and almost crashed. It had been a 20-year Rip Van Winkle slumber. I realized suddenly that I had an irresponsible, unconscious and unintentional money mindset.
I could offer plenty of excuses, but they don’t make me feel better. Shame, grief and disbelief overcame me initially. At times, regret still haunts me. We had lost so much time without taking care of our future.
An acute financial depression ensued. I felt panicked and lost. Our financial realization arrived simultaneously with family health issues, transitional job stress, downsizing and a growing awareness that I had a conflicted relationship with money.
The weight of all this nearly led to a mental breakdown. Yet my tale is an optimistic story of recovery, thanks to a dramatic change in our financial attention and direction.
My wife and I are reasonably high-income physicians, in emergency medicine and psychiatry. We’re empty-nesters now, in our late 50s and living in Tennessee after a long chapter in Chicago.
As is often the case, our relationship with money was forged in childhood. I grew up in a middle-class patriarchal household. My mother was a nurse and then a stay-at-home mom. My father was a state-employed physician and sole breadwinner. Money was a taboo topic when I was growing up, yet also a source of perpetual argument. My parents divorced for many reasons—money among them. We had enough, yet were led to feel like we lived in constant scarcity.
Neither my wife nor I had any constructive money behaviors to model. There was also an utter lack of formal personal finance education. We learned to care for others without learning how to care for our financial selves. Somehow, it always seemed there would be time to take care of this “later on.”
We exited medical school in our early 30s. We had no idea how to allocate the money from our first real paychecks. I now know the recipe for financial independence: Start early. Insure your human capital. Increase your income. Spend less than you earn. Save the difference. Avoid consumer debt. Invest in a simple portfolio of low-cost index funds. Let compounding work for you.
It’s simple, but not easy—and we didn’t know any of it at the start. Immediately out of our residencies, we started a family. We were blessed and overwhelmed with fraternal twin boys. One of them had significant developmental challenges requiring years of intense focus. Happily, in the end, our concerted efforts paid off.
We bought a big doctor’s house and new cars. We hired high-cost financial “advisors,” among them insurance salesmen. We established an inflationary lifestyle that led to a paycheck-to-paycheck existence. We spent first and saved the leftovers.
Who knew what dollar-cost averaging was? There was a never-ending litany of distractions from our money managers. It’s scary for me to think how common our story is, especially among late starters to the financial independence movement.
Our biggest mistakes happened during the Great Recession. We completely renovated our “forever” home in 2007. Housing money was cheap and plentiful then. By 2008, we were suddenly underwater on the mortgage and house-poor.
In addition to our paltry savings rate, we panicked and sold stocks. Committing a cardinal financial sin, we “de-risked” our portfolio at the worst possible time. We missed out on a significant portion of the subsequent bull market recovery. Our non-fiduciary advisor just let us do it. We had no idea what we were doing.
In the end, we emerged from a 20-year wind tunnel of spending with less than $1 million in savings. It was 2016, and we realized that our retirements loomed ahead. At age 50, ignorance was no longer bliss.
I went down the investment book, blogging and podcast rabbit hole. Analysis paralysis set in for a time. I wished someone had created a personal-finance education platform just for physicians. Then I discovered it’d been done. Driven by his passion for giving doctors and other high-income professionals a “fair shake on Wall Street,” Jim Dahle had already created The White Coat Investor.
With this knowledge now in hand, the race was on to take over our financial lives. We fired our financial advisor from the big private bank. We moved our investments from actively managed mutual funds to passive index funds at Fidelity Investments and Vanguard Group.
We left only our checking accounts at the bank. We opened a high-yield savings account at Ally for our emergency fund, and created various savings funds for the intentional needs and wants that we’d identified as still worthwhile.
Our gains were still punctuated by mistakes. Fortunately, we had exited a whole-life insurance policy and purchased term-life insurance. Unfortunately, we had used the proceeds of the whole-life policy to pay cost overruns on our home renovations. Fortunately, we moved from Chicago to lower-cost Tennessee. Unfortunately, we’d built our own house there.
Mistakes are best made when you’re young and have time on your side to recover. We certainly made mistakes, but now our time to recover was dwindling. We finally realized how leveraged our lives had become. To get out of debt and reverse the tide, we shoved our savings rate from the single digits to 35% to 40% of income. We saved as much as we could without eating rice and beans. Painfully, in 2019, we downsized from our costly custom home.
We kept shedding our materialistic weight, including selling our pleasure boat. Appropriately named YOLO—you only live once—it described our old way of living. Lifestyle inflation was insidious and easy. Lifestyle deflation is much, much harder. Yet, amazingly, our overall quality of life isn’t much different than before.
Today, we’re well on the way to financial independence. The goalposts still move a bit, but right now 63 to 65 is our target retirement age. Critical to achieving this goal are following our formal investment policy statement and an intentional life plan. Even with all our progress, our current phase of mindful living can still feel like the hardest part.
Why? The problem lies with our late start. It’s hard to stay on the straight and narrow when we’re surrounded by a community of early starters and early retirees. We have some ground to make up, while our peers can be more relaxed with money now.
Our net worth is up roughly 3.5 times since 2016. Our home’s value makes up 20% of this total. College for our twins is paid off. Thanks to a modest windfall, we paid off the last of our debt a few years ago—and treated ourselves to a hot tub.
A debt-free life has brought extraordinary peace of mind. The hot tub is good for our aching backs. Our nest egg still needs to grow quite a bit to meet our anticipated retirement spending. We are works in progress, but now it feels like we can get there in time.
Can you wake up too late to catch up? Sadly, I think the answer is yes. It’s never too late, however, to take control of your financial life. If the best time to plant a tree was 20 years ago, the next best time is now.
We just don’t let money slip away any longer on the mindless consumption promoted by our culture. Those dopamine hits are short-lived. The Joneses may appear rich, but they probably aren’t wealthy.
We’ve chosen to enjoy the present, but not sacrifice our future to it. I know that’s not assured, however. From my work in the ER, I know that planning on those future golden years can be an illusion.
What’s next? Stay the course. Stick to the plan. Which is easier said than done. We have less time to recover from mistakes, and yet we still make them. The question I often ask is this: While late-starters like us are probably the predominant demographic in society, why do we make up such a small part of the voices in the financial independence community? We’re the silent majority and should speak out to help others that come after us. There’s no better time than now.
Bill Yount, age 57, is an emergency room physician in Tennessee. He wants to help others wake up and join him on the journey to escape the rat race, live a balanced life and enjoy generous time freedom. You can find him at Catching Up to FI and Financial Literacy Project.
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Thank you for sharing your story. We all made mistakes in our life, and glad to know you are on a good path toward FI. I personally did not learn about personal finance until a few years ago in my mid-30s. Good to start now/late, than never. I got lucky in term of always saving for 401K (at least to get the full match from my employer) since Day 1 started working. Cheers to FI movement.
“Late” is relative. Luck plays a role in personal finance for sure.
I gave a copy of The White Coat Investor to the last three people my department hired, each of whom was coming directly out of fellowship. If I had my way, that book would be given to every medical student at the time of graduation (if not earlier). While physicians have a bigger shovel than most people, we also come out of medical school heavily in debt, and up to a decade behind on our retirement savings. And we have giant targets on our back which attract every insurance salesman and shady “financial services professional“ out there. Add to that the consumerism our society pushes, and it’s amazing that any physicians wind up in a good financial position. Jim Dahle really performed a much-needed service when he wrote that book!
Terrific work Bill. Your story will be an inspiration to a lot of others sitting at the crossroads of one of the biggest decisions we will ever make. We will share your story with our subscribers as well.
Hey Paul. Thanks for your kind words and sharing with your audience.
Bill, I am happy to know that you woke up at age 50 when you had more human capital left. When I came to the US from India in 1969 as a college student seeking a Ph.D. in engineering I was almost penniless. I am in the eighties now and thankfully on easy streets. Since I had no money when I arrived in the US I was always conscious about money. I read a lot of books about investment. I was lucky to have read John Bogle’s book ‘On Mutual Funds’ in the early eighties. I also read many more books and articles including Jonathan Clements articles on personal finance in the Wall Street Journal. The gist of what I learned is that it is better to invest in low cost index funds or even better index ETFs, which are more tax efficient. The idea is to capture as much as possible from the overall market growth as John Bogle advocated.
Thanks for reading and congrats on your early start and successful path to independence. Bogle is a hero for the personal investor. I love his books. “Enough” is also a favorite of mine.
Thanks for sharing your story.
My dad was an industrial engineer who taught me to “do the math” when making decisions. Accordingly, I give my 10-year-old daughter extra “mom-math” lessons to ensure she is able to apply math to real-life situations. You’ve inspired me to plan a compound-interest assignment for her. I am going to have her calculate the savings accumulated if she starts saving 40 years, 30 years, 20 years and 10 years ahead of her planned retirement date.
Wish I had parents like you. Glad you are inspired. You go girl! Help us spread the word.:). Reverse engineering your life and taking care of your present and future selves is hard to do but critical to a balanced life.
Bill, I enjoyed reading your story, especially concerning your “awakening”. You and your wife are still relatively young and I’d say your path forward looks bright.
In addition, you might be a good person to give a few “personal finance” talks at med schools!
Thank you for your comment. The utter lack of good personal finance education in our system has always been appalling to me. A combination of developmental mentorship and formal education in the financial independence arena is a mindset (80%) and mechanics (20%) essential combination for a healthy approach to money. This is especially true in the high-income area where people can be so “smart” but dumb with their money. Physicians have historically had a bad rap for a reason. I had no formal education in school at all. It probably would have been one of the most important classes I would have taken in med school. Finance is a critical universal language and not hard to learn. Thankfully this is changing not in small part due to the student debt crisis in professional education forcing students to pay attention to their money, sadly often after the fact of accumulating the debt. My friend Jim Dahle created his multimedia platform The White Coat Investor expressly to help high-income professionals and especially doctors learn, save, and invest to “get a fair shake on Wall Street.” I am happy to say that the tide is turning. The question is what do all the prior generations do to wake up and get on the bus to financial independence? Shame and regret are paralyzing. I hope my story reaches “the silent majority” of late starters and gives them a reason to “wake up” and start now.
Luckily you and your wife are such high income earners that it sounds like you are doing ok. (Just under $1 million in 2016 and now 3.5 times that makes me think around $3.5 million right now?)
Many that are much lower on the earnings ladder would have to work much longer and possibly still not be able to achieve what you guys have in a short time.
Thank you for the great article and hopefully it helps many others “wake up”.
Nate, exactly my thought! Basically, holy cow! $3.5M! Who couldn’t retire in their early 60’s and live on that – especially with no debt, kids’ education paid off, etc.
Still need to match our nest egg to our current spending at a reasonable SWR.
What do you consider a safe withdrawal rate? (Percentage wise)
4% rule or something lower?
4% is the plan.
A big shovel certainly helps a great deal to correct mistakes.
Truly powerful story Bill! I see so many of my own mistakes in your post. I hope you (and more like you) will talk about this pandemic of threatened and insecure retirements for 50+ y/o’s.
Planning a podcast called Catching up to FI as a matter of fact.:)
Thanks for the interesting and apparently first article for Humble Dollar. I hope you will write more in the future.
I first came to Tennessee to attend college in 1968 and except for my time in service I have been here ever since. The cost of housing in Tennessee continues to be substantially below the national average. My youngest brother who lives in southern California was visiting here six years ago for my daughter’s wedding commented to me that he could sell his CA home and buy three here for the same amount.
I think controlling ongoing housing expenses is a key building block to being financially comfortable. I am concerned the housing trend costs will make reasonable housing costs difficult or impossible for those currently entering the market.
I am glad you are here in Tennessee.
TN was accidental geoarbitrage. We love it here for financial reasons among many other. Where are you? Maybe we can meet up someday?
I live in Knoxville. I retired after 40+ years in late 2022 from being a CPA so my time is relatively flexible. Meeting would be great.
Find me at the Facebook group Financial Literacy Project or Catching up to FI. The links are at the end of the article. Give me your best 3 dates as my schedule is a bit erratic
You can DM me on Messenger
I have mailed my phone number and email address to your home address. I decided long ago to not register to be part of Facebook. I hope we can meet in the future.
We did on 2/16/2023. A great meal and a terrific conservation for 2 1/2 hours. It was a good day for Tennessee when Bill Yount and his wife decided to move here.
A good story that shows no matter one’s income or status, a healthy rate of saving and spending is essential. It seems like changing to a simpler lifestyle didn’t doom you to a life of misery, so that’s a plus.
Best of luck on maintaining your path. I know it’s hard to when others around you are entering a different phase or pace of life.
It was amazing how downsizing and flipping the switch to a savings rate of 35-40% didn’t really change our lifestyle much. Thx for reading.
Having a high income has its disadvantages – many highly successful people think they’re good at everything.
I was smarter than many high-income earners, but had an average income. This makes you think a little. Looking back, I can’t really say what led me to save huge amounts of money, but not being a high earner helped.
More money, more problems as they say!
21 states and counting are requiring courses in finance which is great. The SIMPLICITY of investing during the accumulation phase can be taught to a 2nd grader. Starting early with stock index funds is a great start
I wholeheartedly agree. Thanks for reading and commenting.
Nice to read a story with a good outcome. There are many good lessons here for anyone who will pay attention.
You say your problem was a late start, but I think the actual problem was spending and investing choices over the years which is the case for many people.
It wouldn’t hurt for a basic personal financial course to be added to the medical school curriculum- seriously.
In any case, your story will help others get on the FI path sooner.
Next time the market crashes, don’t sell stocks.🤑
I am glad to hear that you liked my story and find it will help others spark their own FI journey. I admire your work.
Bill, when I sit beside the young physicians during my occasional hospital duty, I look for an opportunity to ask them about their retirement planning. I know they face many lifestyle temptations, and may not have ever thought about a different path. I don’t know if they are really listening, but I’m hopeful.
I was the prototypical paycheck-to-paycheck physician with an ever-inflating lifestyle. I just want to help as many others as possible see the possibilities of an early start to saving and investing.
After 36 years as a primary care physician, I understand this all too well. My first 16 years with a large group we were compensated reasonably well for primary care but we worked like maniacs. Stress and a paucity of free time triggered the “I deserve this” mindset. Thank God for 401K’s and automated savings during that time!
Paradoxically when I took a job 20 years ago with far less compensation, I started saving more as I was much more conscientious regarding where the dollars went, and there was more time to find better deals.
I completely agree that the lack of financial literacy is so disturbing. Most of the concepts are very easy to understand. Sometimes I think our society doesn’t want the average Joe to grasp the basics, as that way they can be more easily fleeced. And physicians do have targets on their back.
I scaled back to manage burnout and took a moderate pay cut. My wife works full time and offsets this move a bit. Life is a team sport. Oddly, surprisingly, and happily our lifestyle has changed little after downsizing and being intentional with our money as well.