7 Personal Financial Critiques Answered

Recently, I was published in The White Coat Investor as a guest author. The White Coat Investor is arguably the most influential physician finance platform (for now, wink wink). It has a massive readership, and by publishing my work on a more established website, I can reach a larger audience. This is Blog Growth 101; utilize the influence of others to cultivate your following.  

My recent post was A Financial Love Letter to My Wife (and the Realities of Living Like a Resident). If you have not had a chance to read the post yet, please do so now before you read any further. The post was a somewhat transparent look at my finances, our debt elimination journey, and a thank you to my physician spouse, who is working equally hard to fix our financial situation. Though I am incredibly proud of this post, it was met with some criticism.  

There are constantly varying opinions, and the internet and social media age have made it relatively easy to express your opinion. Honestly, I was flattered at the level of engagement, for better or for worse! Good or bad, comments mean readers, and readers mean publicity. However, some of the ‘constructive feedback’ was appropriate, and I wanted to answer some of the biggest critiques as best I could. Here are 7 Personal Financial Critiques Answered!

1% Problems: A Disclaimer

Before we dive too deep into this post, addressing the elephant in the room is essential. What I often write about and what the vast majority of physicians discuss on The Motivated M.D. and other personal financial platforms are ‘1% problems.’ Let’s call it what it is. That does not make it any less important or impactful for our profession, but to the rest of the world… it can seem like we are complaining about having too much. I get it—appropriate feedback.  

We are fortunate to have primarily six-figure salaries and job security for most physicians and other healthcare professionals (i.e., dentists, pharmacists, mid-level providers, CRNAs, etc.). Though we are often subject to significant educational expenses that result in large debt burdens, if managed appropriately, these obstacles can be overcome and lead to success, wealth, and often prosperous lives for ourselves and our families.  

So, before you read on, please remember that all I discuss in this post and on this website is mainly in the context of how our high-earning professions can better navigate the challenges our career faces in particular. It is not lost on me that our financial woes can be interpreted as ridiculous to the rest of the world.  

That said, our profession experiences unique financial challenges from most other professions. I want to continue to create applicable content for those pursuing healthcare professions and navigating the financial burdens that can prevent physicians from enjoying their lives and careers to their fullest.  

7 Personal Financial Critiques Answered

1. We Are Not Living Like Residents

The first critique to address is that our family is not actually ‘living like a resident.’ This is a fair criticism entirely. For those who do not know, this phrase is credited mainly to The White Coat Investor. The idea is that you live on a budget only a medical resident would have for the first 2-5 years of attendinghood. This frees up a substantial portion of your new physician income to fix your finances, eliminate educational debt, save for a home, etc.  

The post I published was mainly about how we are ‘living like residents’ and the financial and emotional challenges we face while we do so. However, when readers see we have a single-family home, a boat, and a full-time nanny, they, appropriately, grow skeptical. I would better characterize our finances as ‘living like dual-residents’ or ‘residency-lite.’ 

See, my wife and I are both academic physicians. As such, we do leave some money on the table, given that we would make more competitive incomes if we were in a hybrid or for-profit healthcare system. However, to live near family and simultaneously live in our ideal coastal environment, we have limited options for where we can be employed. Further, if you review the math from my guest post, you will see that, following the removal of retirement, healthcare, and other deductions, nearly 33% of our take-home pay goes towards debt elimination. Another 17-18% goes towards childcare, a necessity (which we will address later), and roughly 12% towards our mortgage.  

As a dual-physician household, if we lose 35% to taxes, max our employer retirement contributions, and then put another 33% of after-tax income towards debt annually, we already live on only 38% of our earnings. Now, assuming our nanny is necessary, I will begin to make a point that we may not be living on the same salary as two trainees. Still, we are living substantially below our means to eliminate debt and improve our financial footing efficiently.  

2. A Nanny is a Luxury

Given that the ‘nanny discussion’ struck a nerve with many readers, let me discuss why a nanny, for our family, is viewed as a necessity, not a luxury. To be clear, having a full-time nanny is incredible but comes at a steep price. 

Many often comment that if we were genuinely optimizing our income, we would use daycare or have a nanny share. Unfortunately, with my wife being an emergency medicine physician and I an intensivist, our schedules are sporadic and change every week. My wife has a myriad of morning, evening, and overnight shifts constantly. If I am in the intensive care unit, often nearly 10-12 hour days, and my wife is working, then there is literally no daycare that operates during the early hours of the morning and the late hours at night we would need to balance our careers and our childcare needs successfully. We looked… a lot.  

Further, given that we both are full-time clinicians, we do not have the luxury of regularly calling out sick if our children become ill, a common problem for anyone who has kids. Unfortunately, our profession (primarily addressing emergency medicine and critical care) is not amenable to telework.  

Unfortunately, after the realization that daycare was not an option, we looked at nanny shares. Again, we ran into the same issues: hours not conducive to our work schedules. We even considered an Au Pair. This is common for healthcare professionals given higher incomes and long hours, but again, we did not have a room in our home with two kids and an in-law.  

Our only conclusion was that, given our professional schedule, a nanny, though wildly helpful, was also a necessity. We need at least 40 hours a week, sometimes more. Given our irregular work hours, we also needed an individual with significant flexibility.  

To provide some statistics, according to ZipRecruiter, the national average for a full-time nanny in the United States as of December 2023 is $24.00/hr. Using this statistic, employing a full-time nanny (40 hours a week) for a year is just shy of $50,000 ($49,920 to be exact). 

Assuming that a nanny is necessary to allow my wife and I to work full time, then using the math applied previously if we live on 38% of our income, and now you subtract 17% (cost of nanny as above), then in reality we live on 21%. 21% of our income is very much living like (two) residents.  

3. Academic Salaries are Ruining Us

Agreed! 

I do not disagree with the masses on this one in the slightest! There are significant pros and cons to practicing academic medicine. One of my earliest and most-read posts is titled The Pros and Cons of Academic Medicine. Here, I discuss all the reasons for and against pursuing an academic career. 

However, for the sake of this blog post, let’s strictly address income differences. I make nearly six figures less than I would if I practiced in the community. I do not write this lightly. I completely understand the importance of living up to your income potential. Sometimes I want to apply for ‘that job’ in rural Montana and triple my income. However, this would not be in line with my values.  

More recently, I have been writing about aligning your money and values. This is how you can most effectively utilize your income to improve your quality of life and your happiness. I could quit academics, move to rural middle-America, and make more. Unfortunately, I would also be further away from family and friends. I would also be moving away from my dream location. I would be uprooting my children and abandoning the dream my wife and I share to build a life in our coastal city.  

So yes, our academic salaries are hamstringing us, some would argue, significantly. I agree. But I have also found a situation where the income I create aligns with my long-term goals, and I have found joy and peace in this realization. This may change one day; who knows?

4. A $650,000 House is a McMansion

This was a great comment and one that I am excited to write about. I hope this discussion leads to more interaction and perspective. Interest rates and housing shortages are juicy topics for discussion, always. Given our delayed gratification, I have found this even more prevalent in healthcare professions. Generally, a home is one of the first purchases physicians and other healthcare professionals make following training as they feel they ‘deserve’ it. Let’s explore this.  

During my final year of fellowship, I had been offered a contract to remain on as faculty. My wife was already a faculty member at the same institution. We were here to stay; this was obvious. However, with our first child on the way and the fact that we were renting a smaller home, we needed a place of our own.

This was 2021, peak COVID, and the housing market (for sellers) was out of control. I was confident we were making the biggest mistake of our lives by purchasing a home in this market. Offer after offer, we placed and were laughed out of the room. We were offering the asking price, and they looked at us like we were crazy.  

One fateful day, a 2800 square foot, four bedroom, 2.5 bathroom home came on the market, and we decided to put an offer down, sight unseen. Though it felt like the craziest thing ever, that is now the house we call home! Funny how the world works sometimes. However, we did secure an interest rate of 3% using a physician mortgage loan. The purchase price was $650,000. At 3% interest, our monthly mortgage expense totals about $3,400.00 (~$40,000 annually) after factoring escrowed insurance, etc. So, is this a McMansion?

According to Fool.com, the median home sales price in the U.S. is $431,000 as of the third quarter of 2023. According to Redfin and Zillow, in my coastal city, as of October 2023 the median listing home price ranged between $525,000-660,000, depending on the literature you quote. I have chosen a lower-paying academic career in a higher-cost-of-living area. All things considered, labeling my home as a McMansion is, at the least, debatable.  

5. Not Pursuing PSLF Was Dumb

Right again! 

Like our decision to remain in academic medicine, not pursuing PSLF was dumb. I would agree wholeheartedly. Now, a brief explanation is in order. We initially did intend to pursue PSLF. While I was still in residency and my wife was completing a fellowship, we were on the PSLF train.  

However, soon after I matched into fellowship, my wife worked at a hospital that did not qualify for PSLF. We were carrying nearly $670,000 worth of student debt from our combined medical education. Our interest rates, largely unsubsidized, ranged between 6-8%. With my wife under contract to pursue a job at a non-qualifying employer and I to start another three years’ worth of training, our debt seemed insurmountable, and the interest was climbing. Given that my income for the next three years would be minimal and my wife was no longer a candidate for PSLF, we decided to refinance.  

As fate would have it, shortly after our relocation and initiation of my fellowship, she was offered her dream job as an academic physician at the hospital where I was a brand-new fellow. We had already refinanced, so the point was moot, but she was able to break her contract and relocate to her current position. Since that time, having already refinanced previously and with PSLF no longer an option, we have refinanced multiple times to get our interest rate down to approximately 3%.  

Did we make the right decision? Who knows? We made the best decision for us at that moment in time. Should we have waited longer to make this irreversible choice? Probably, but there is no sense in dwelling on the past. What’s done is done. To read more about our choice, check out our prior article, Choosing Refinancing over PSLF.  

6. We Are Paying Down Debt Too Aggressively

Another common theme that appeared was that we may be overdoing it. As mentioned previously, there were some comments that we may not live as frugally as we should. For every one of those comments, however, there appeared to be another that expressed concern that we are overdoing it.  

This is another excellent observation and an interesting point of discussion. As time has evolved, I have spent more time sharing my financial journey and interacting with others. I have discovered that debt elimination is very personal. Hence, the name personal finance.  

It is personal because so much emotion is tied to income, spending, debt, etc. Understanding and exploring our feelings around our finances is underappreciated and likely, if unpacked, could help us find more joy in our finances. However, the explanation for our debt elimination cadence is strictly from our debt aversion. I dislike debt, plain and simple. I would say I hate it, actually.  

Our family is on track to pay off my wife’s debt in 2024. Following this, my debt repayment will be on autopilot as I receive loan reimbursement through my employer. At that point, I will not pay a penny more than my monthly required minimum. This will lower our annual payments and ease our self-induced financial constraints. Individuals can burn themselves out if they are so fixated on maximizing their dollar that they fail to enjoy their earnings. So this is sound feedback worthy of consideration for anyone balancing quality of life and debt elimination.  

7. We Own a Boat

This one always makes me laugh. Why does it always come back to my boat? As alluded to in the White Coat Investor article, I still regard it as potentially our worst financial expense. However, though it represents a splurge expense in the personal financial community, it has been blown a little out of proportion. There is a story behind our boat, and I am happy to share it.  

Early in 2020, my wife and I had a 14-day dream trip to Great Britain, which we bought and paid for. Then COVID happened, and international travel became non-existent. We got nearly $10,000 reimbursed, given government-mandated cancellation, but now we were left with a two-week vacation without anything to do. 

Living in a coastal city, owning a boat was always a dream. It just so happened that we discovered a small center-console boat for sale for $9,500. It was an absolute steal. We paid for the boat in cash and now keep it dry-stacked at our local marina. Could I have put all that money towards our debt and moved on, enjoying a staycation without big expenses? Of course. However, as we often discuss, we must align our spending with our values.  

I value financial security so much that I write about it weekly! However, I also love my life and my marriage. Though an unnecessary expense, the boat was also not egregious. It offered joy and allowed us to experience our city from a different viewpoint. It was a want, not a need, but one that has brought joy and opportunities to our family and friends. I do not regret it.  

Take Home Points

This post was mostly an exercise in receiving feedback from the personal finance community and using this platform to express my financial choices, the stories and experiences behind them, and where I agree entirely and recognize my flaws. Some comments are correct, but the community only has part of the story. Some are correct, plain and simple. And some I respectfully disagree with, which is OK! 

The interaction of varying personalities with different experiences and perspectives allows us as a community to grow and learn. I appreciate The White Coat Investor for allowing me to share my story with others. I am also thankful for anyone who is entertained enough, for better or worse, to interact with my work and leave a comment! Thank you! As always…

Stay motivated!

The Motivated M.D.

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