This week I talk to Dr. Jimmy Turner about his experience in building wealth quickly during his first three years out of residency. We talk about mistakes he’s made, how he deals with societal pressures to buy things before he has the money, and his “gold standard” for financial planners, and how to hire the right one.
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Justin: 01:10 Hello everybody. Welcome to this episode of the anesthesia success podcast. It is my pleasure to welcome back to the show. The physician philosopher also known as Dr Jimmy Turner. The last time that Jimmy was on the show, he was still an international man of mystery joining anonymously, but Jimmy has a, an attending anesthesiologist at wake forest. He also has a, a really popular physician finance and lifestyle blog called the physician philosopher. So check that out. The physician philosopher.com. He has turned into a personal friend over the last couple of years and we’re just going to spend a little bit of time today unpacking some interesting topics pertaining to rich doctor problems pertaining to career transitions and other sort of questions that young positions are frequently dealing with as they’re trying to build careers, gain clinical expertise, maintain sanity, have a family life, successful marriage, raise kids, all that stuff. So Jimmy, thanks all for being here. Thanks Justin. I appreciate having me honest to some, I’ve been looking forward to a lot. Yeah. So why don’t you talk a little bit, cause I think the last time that I gave you an intro, it was a little bit more guarded. So talk a little bit about your current scope of responsibilities at wake and the other things you’ve got going on.
Dr. Turner: 02:18 Yeah. So it’s been an exciting last several months I guess. The book came out in, I think February is right with, with that I became not anonymous on my site, so I got to have a anxiety provoking meeting with my chair and got his permission to put my name on my site and on my book and to stamp wake forest name on it. So that was actually fantastic as probably the peak moment of my career fulfillment
Justin: 02:44 So far. Some, what was it like walking into that boardroom kind of not knowing what was going to happen?
Dr. Turner: 02:49 Yeah, it was, it was, it was actually really scary because you know, he has the ability to tell me he wants me to shut it down. He’s my chair. Right. And so I knew that he is a bit of a forward thinking person, so I thought that it might be okay, but I just didn’t know. I didn’t know the hospital think about it. So when I talked to him, I was, you know, obviously guarded and nervous and anxious, but at the end of the day he found value in it and he thought that it’s something that not a lot of other people are doing. And in fact, very, very few people in academics are doing. Most of the people out there writing this stuff are in private practice. And so it was a way to separate wake as a, as a hospital and as a, as a training medical center.
Dr. Turner: 03:29 So yeah, it was, it was great. But by the end of the meeting I went from being completely a nervous wreck at the beginning to just being on cloud nine. I was so excited that, that he thought that it was worthwhile. That’s great. Did you find that some of your colleagues kind of coming out of the woodwork to say, oh my gosh, I was, I’ve been reading you for a long time and you know, I haven’t had a ton of that. I’ve, I’ve had some residents come up to me and say that in terms of people at work that I work with, a good number of them had already known. Okay. You know, I have probably eight people in my section, so it, the regional anesthesia section that’s in the anesthesia department and most of them already knew [inaudible] and I had some close friends that are in the other sections that, that new as well.
Dr. Turner: 04:11 So it wasn’t a huge coming out to them. It just wasn’t something I publicly discussed and some certainly about something I discussed with any administrators right before, before that. Cool. But it all worked out, so that’s great. Yeah, it was great. So you know, in addition to obviously being a blogger, you’re a physician you’re at a, in a training hospital. So what’s, what’s your scope of clinical and teaching duties? Like right now? Yeah, so clinically I do about 60% regional anesthesia. So I know your audience is familiar with those terms, but a and 40% general or so, it depends. It varies week by week. And clinically I just kind of go where they put me in terms of teaching. I was recently granted the opportunity to have a personal finance curriculum for the fourth year medical students at wake which we’ve extended to the crns and PA students as well.
Dr. Turner: 05:01 Nice. and so that will be kicking off in January of 2020. And you’re, your listeners may not know you’ll be taken apart being a speaker in the inaugural curriculum. Yes. I’m very much looking forward to that. That’s going to be fun. Yeah, no, I’m really excited about it too. And it’ll be a 10 week course and so I’ll be running that from January until March, the Tuesday before match day. And I’m really nervous about it. I’m really excited about it. I have lots of mixed emotions. But I hope it goes well. I hope that is helpful. And I hope that we can increase financial literacy for the students at wake. So that’s, that’s really the big educational thing that I’m working on right now. Okay, awesome. And so you just got a new crop of interns and everybody else, all the residents are bumping up a year.
Dr. Turner: 05:43 So what’s, what’s the climate like right now? My, my wife and I always joke that July 1st is always the most interesting time to get a surgery cause you’ve got all these newly minted physicians running around that you have varying degrees of expertise. Yeah, no, there’s always, there’s always something that happens in July. But it’s it’s usually well kept in, in our anesthesia department, our attending sit one on one with the, the new ca ones in the, or for a couple of weeks, two to four weeks, and then maybe four to six or four to eight weeks. They’re one on one with a classmate and the attending may have one room or two rooms if they have an upper level with them. So we, we have a pretty you know, close look on people. The first four to six weeks they’re starting at wake. I know that not everywhere does that. And by the time they finish their training, they get a tremendous amount of autonomy. But to begin with, you know, we, we, we keep a close eye on them until July.
Justin: 06:37 Yeah. I know they do that at Penn. My wife was telling me about the one on one for the first month with an attending just to get everything dialed in. I think the smart way to do it makes a lot of sense. Yeah. So one of the things I wanted to talk about today was what I’m putting in air quotes is like rich doctor problems. Okay. One of the things that comes with being a physician, and this is true and I would say several other high earning professions, is that when you make a lot of money in a profession where people know it so people can perceive it, people at least suspect, and obviously you and I both know, just because you make a lot doesn’t mean that your finances are at all in order, but, right. But it can change the dynamics of relationships.
Justin: 07:17 It can change the way your family treats you. It can change the way it kind of works when you go out to the bar with your friends. So I’m curious to kind of unpack this a little bit and what is your experience been like moving through med school as like a broke med student to a heavily indebted resident to, you know, now an attending who’s, you know, has aggressively paid off student loans and trying to push that net worth needle into positive territory. How has that, how has that journey happened for you and how has this dynamic of like you’re a doctor, a rich doctor in air quotes and ha ha. How have you engaged with that idea with your, your friends and family?
Dr. Turner: 07:56 Yeah, so it’s I guess a lot to unpack there. I’ve been on two different journeys. One was becoming financially literate, which I didn’t do until my fellowship. So that’s been, I guess three, three and a half years now. But before then I was very financially illiterate. I knew nothing about money. I knew nothing about personal finance. And so during medical school I was poor, but I didn’t live as poor as I should have. And so I racked up more debt than I, than I should’ve come out of medical school with. And I came out with less than average. So that was nice. But all things said, you know, I kind of see different journeys going on where I had the journey to, you know, making a real attending paycheck and the journey to become financially literate. And I’m extremely fortunate those things happen about the same time.
Dr. Turner: 08:38 So I didn’t, I didn’t, you know, do a lot of the classic doctor mistakes right when I finished. And because I didn’t do that and I kept things in check. You know, so I was talking about the 10% rule. So I, I took a 10% increase in my post tax pay or my post tax increase, I should say. I took 10% of that and it on whatever I wanted. And then 90% I put towards, you know, paying down my student loans and investing. And because of that, my lifestyle didn’t look that improved from the outside perspective. So people were surprised when they’d come over to our house and I was still living in the same house that I lived in as a resident and as a medical student. So to be clear, whenever you got the
Justin: 09:15 Raise as an attending, that big jump of, you know, a couple of hundred k potentially, you took 10% of that jump. So call it, I don’t know, we use round numbers, maybe it was 20 k or 25 k and you went and did something fun or,
Dr. Turner: 09:30 Yeah, so you can just different ways you can do it on an annual perspective. So the way that I did it was on a monthly perspective, my post tax pay was going up by $10,000. Okay. And so I took $1,000 a month and I, I don’t recommend this to anybody by the way. I financed the car and I bought a country club membership for my family. And so that ended up being a little bit less than a thousand dollars a right at it. And then the other $9,000 I put towards my student loans, I paid off $200,000 in 19 months. I put it towards investing, which was incredible by the way. Congratulations. Yeah, thanks. I appreciate that. Yeah. And so we’ve had great success. So people, they have all these rules about personal finance and like to put people in a box. And I was a philosophy major, so I’m not that way.
Dr. Turner: 10:12 I don’t like to do that. I like to give people guardrails and you know, they can bend the rules and do whatever they want as long as they’re achieving their goals. And so I did something really financially stupid. I bought a car, bought, I financed a car that’ll be paid off next month. And yes. And so we’ll be debt free outside the mortgage. But that said that’s not a smart financial decision. I’m not going to pretend that it is. However, I was still able to achieve great financial success and you know, improve our net worth from negative $210,000 to like positive, you know, a hundred in two years. So it’s been, it’s been a wild ride. But that said, when I started, we, we didn’t have this just giant boom and lifestyle. So we didn’t have people coming over all the time and asking us for money or asking us.
Dr. Turner: 11:01 I was just the same old neighbor I had been for the last 10 years when I didn’t have a high income and I happened to have a different car that went into the driveway. But outside of that, not much else changed. So I didn’t have a ton of pressure. I will say that when we bought our house in November, after we paid off those student loans I’ve had a few people make comments like, hey, why don’t you do this? Why don’t you do that to this new house? And I always tell them, cause that costs money, you know? And so I at this point, you know, we have, we don’t have a dining room table. We don’t really have furniture on the back deck. Like there’s several things that we still want to do, but it’s gonna take time. We’re going to grow into it. And that has confused some people cause they’re like, well, you can’t just finance the furniture. Why don’t you just buy it now? And so it’s been more interesting actually two years out than it was right when I finished.
Justin: 11:47 Yeah. Yeah. Interesting. one of the things, one of the, the genesis of this question for me, I was to a friend a, it was a couple months ago now, and he was talking about, he was the first he might’ve been the first college Grad in his family and his wife is also a physician. And they were talking about and now that they are both mds and as you know, being a resident, it doesn’t mean you’re making a lot of money, but in their family they had attained the highest level of education of any ebony of their immediate or extended family. And so there was this dynamic that they were trying to navigate where all of a sudden they were the successful white coats who were sort of seemed to be the safety net whether implicitly or explicitly in different contexts. And they were trying to navigate what does it look like for us to engage with our family and care about and support the people who we do love and feel like we want to do that for it, but also build a life that we’ve kind of worked hard to.
Justin: 12:48 Yeah. We want to make it look the way we want to make it look. Yeah. Is that something that you’ve had to deal with at all? Maybe not family, but beyond.
Dr. Turner: 12:55 I’ve dealt with it a little bit. You know, I’ve, I’ve certainly had friends and colleagues and residents that have had to deal with it more than I have. You know, I, I think that where we noticed it the most is, is when we don’t do something that other people want us to do and they want to get into the weeds about why we say, well, it’s because that’s not in our budget right now. I don’t do a line by line budget, but I know that that’s not in it. I’m not going to the beach this summer because I can’t afford it. You know, we took a trip to Saint Lucia, that’s what we did with our vacation money this year. Right? And so that, that, that does produce interesting conversations because people just assume that money grows on trees when you’re a doctor and that you have as much as you want to spend.
Dr. Turner: 13:36 I’ve had other colleagues who have interesting family dynamics where they’ve had big problems with this. You know, people take care of their kids and they want their kids to have certain lifestyles. And one of my kids, I’m either their grandchildren. And that’s a really tough situation because when someone has a certain expectation for your life should look like, and they’re an integral part of your life and you see them every day or friends or whoever this might be, it’s challenging because they don’t understand how you can have such a high income and not be able to spend or afford the lifestyle that they think that you should have. And so lots of boundary setting conversations and you know, goals and sitting down and explaining the reasons behind what you’re doing. Because not everybody’s life is nobody’s life is gonna look the same. Right. So yeah, absolutely. I definitely know people that have really struggled with that. And it can be, it can be an issue.
Justin: 14:32 Yeah. And something that I encouraged this friend and I’m interested in your thoughts and this is to just, the first thing you want to do is make sure that you and your spouse are on the same page because you’re both going to be getting it from your own families and you need to be of one accord. And what are our priorities? What are the things that we want to spend, not only our money, but also our time. How are we gonna Orient our lives? And then for what types of
Dr. Turner: 14:54 Ah,
Justin: 14:54 Requests or in which conversations are going to want to engage to support, you know, throw a couple of hundred dollars into my nephews, five 29 for his birthday versus give my sister a couple hundred dollars to help her through a sweet 16 party for her daughter. Like those, the way those priorities weigh out may be different. And if you and your spouse have agreed upon previously, like this is the priority for our family. This is what we value in terms of relationship and time and money spent. And these are the things that are gonna make the cut and not make the cut. That can be a, you can nip a lot of those conversations in the bud potentially.
Dr. Turner: 15:32 Yeah. You know, I think that being on a, you know, having a unified front is, is more important than anything else. And so, you know, what I encourage people to do is probably the post that I linked to most on my side is that kinder questions, the three kinder questions, k, I. N. D, e. R. A where it basically goes through the process of helping you figure out what’s important to you. And, and as you go through that, you’ll notice there are lots of things on there that people tell you are important houses and cars that, that you never talk about. Because at the end of the day, those aren’t the important things. So you may choose to value how early you’re financially independent and retire or your kid’s college education or paying down the mortgage or other, other things that take money. And at the end of the day there’s only so much money that happens and you have to decide how much that to spend on yourself, how much that spend on the future, how much you spend on other people.
Dr. Turner: 16:19 And you know, what my wife and I really try hard to do is to let our money reflect our values. And so, you know, that results in US tithing 10%, you know, off the top for our church and that’s going to involve that probably increasing over the future and then giving you other people even outside that money. And that technically slows down our progress towards our savings goals. But we don’t miss the money cause it’s the right thing to do right now. Explaining that to someone else. That’s an interesting conversation because as long as my wife and I are on the same page and we understand our goals and what we’re doing and that we’re trying to help people and also save for our future, it doesn’t matter a whole lot to me what other people think. And so I try to have the conversation if I can, but I’ve definitely had family and friend conversations where the person just doesn’t get it. You know, and that is challenging. But like you said, I think that the important thing is that you and your spouse are on the same page and if you are, then you can kind of weather the storm of any difficulties that come up and hopefully, you know, nip it in the bud if it’s possible. Right.
Justin: 17:24 Yeah, that makes a lot of sense. And what I’ve found is that between your mid twenties when you’re wrapping up med school and doing residency, and then your mid thirties, there is, there’s a, that’s a hugely formative period for you as a physician and as a person. And what happens is, you know, you’re in your 20s, you’re just trying to spend as little as possible find a place that you can afford and then try to pay $2,000 cash for your car that hopefully is going to last you six years. And then by the time you’re an attending the opportunity set opens up and you go from just wanting to crush your debt, which is like a very single minded thing, which is where my wife and I right now are right now, which is like, we got a lot of student loans and it’s very easy to know what our goals and priorities are because it’s literally at the end of the month, shovel all the extra money over to a common bond or whatever. And, and then we’re going to just keep on trucking. And then once you kind of cross over that precipice, which you’ve recently crossed where the student loans are all of a sudden are gone. Now we have to talk about goals and priorities in a new way. And this, that it’s sort of like revisiting some fundamental assumptions. I think. So how has that gone for you and your wife?
Dr. Turner: 18:32 Yes. That’s why it’s important to, to revisit these conversations exactly like you said. And so my wife and I tried to sit down and, and have conversations about what we’re going to do with additional money. So next month when we pay off both of our cars and our mortgage free, you know, definitely outside of our mortgage, we’re gonna have cashflow, you know, a couple extra thousand dollars a month. So where does that money go? And Mike, my kid, my five year old who started kindergarten in August or September is also not going to be in daycare anymore. So we have additional money coming from that. And when, I mean, this is, this is the powerful part of the story, right? When all your debt starts to get destroyed and all of a sudden you have tons of cash flow coming in that you can decide what to do with it. That sounds great. And it is, but now you have to make the big decisions about what to do with it. Are you gonna keep pounding money into your savings so that you can get financial independence even sooner. Are you going to give more money to other people? Are you going to, you know, give to charities like exactly what that’s gonna look like? And so it involves lots of sitting down on the, you know, the back porch and having conversations and trying to figure out what’s important to us. Totally.
Justin: 19:43 Yeah. I’m sorry, go ahead. I was gonna say, that’s a perfect sort of segue back to what you just mentioned is that the kinder questions, which is this, it’s three questions that we actually discussed. The last conversation you and I had about sort of excavating your personal values in the context of a family doing the same to be able to align your money and your time with the things that are really important. And it only gets more and more important as you experience more material abundance because that is really a great opportunity and it can go really well for your family or it can be a cause of like a conflict and resentment. And you know, if the spouses aren’t on the same page and one is looking at the other’s credit card bill that they’re running up every month, that can be, that can just be incredibly destructive.
Dr. Turner: 20:26 No, I, I agree and I’d be lying to you if I said that after I started figuring stuff out that we haven’t had any financial stress. I mean that’s not something that goes away because ultimately you have to decide what to do with the money and it’s challenging. I think the more that you learn about personal finance, the harder it becomes. Not too particularly nowadays with, you know, financial independence and the fire movement and everything. It is challenging not to launch a squirrel away. Every dollar that you can and at some point it’s not healthy. I mean, you need to spend some money, you need to go on vacations and needed some things that are enjoyable now. And you can see the, it cuts both ways. You can just not save it all cause you’re just living for the moment or you know, squirrel away, everything and not enjoy today. And there’s a balance somewhere in between those two points. And that requires lots of conversations and honesty and, and you know, hopefully not too many hurt feelings.
Justin: 21:20 Yeah, totally. And that’s something my wife and I have discovered, you know, I can tell when I pick her up you know, like after a long day and we’re, we’re headed home, it’s like, well, we could just go home and cook dinner and I know that she’ll be passed out in like 15 minutes and this is like the only time I might get to see her in a three or four day span or you know, maybe we’ll stop somewhere and go out to eat and like pay 40 or 50 bucks that we might not, I would otherwise be inclined to not do that. But the fact is like, I’m, I’m kind of buying time with my spouse and trying to care for her and making her not like participate in cooking dinner and whatever. And that is definitely like below, like sort of paying off our student loans. The next thing that we do value is time together. And if we can buy back a little bit of that, even as a, you know, on the resident’s salary it’s a, it’s something that I don’t even, I, you know, I’m quite happy to do that.
Dr. Turner: 22:10 Well, and that makes sense, right? Because ultimately the reason that you’re saving for your future is so that you can have the time to do what you want and so it makes no sense to give away all your time right now in order to do that. There are things in life that are worth something that have intrinsic value and yes, they cost money. Yeah. 100%. Absolutely they’re worth it. And taking your wife to dinner is probably one of those things.
Justin: 22:33 No question. Cool. I want to pivot a little bit and let’s talk about impostor syndrome. I know this is something that you and I have spoken about a little bit and so this is the idea that you feel like you’re a fraud essentially, that you’re in a very like high functioning, demanding vocational environment where you’re, you have to make very important decisions and you as a physician and you know, me as a finance person, this is translates well across, I think all different professions. Don’t feel well. You kind of look around and think like, surely somebody else is going to be the one who’s making this decision. It can’t really be me because I am utterly unprepared either from like training or from just you know, personality. Like I, I can’t handle it. And it’s funny, my wife was even telling me yesterday, she, you know, she’s in the ICU right now and having to have these very intense end of life conversations with families and there’s, you know, there’s no attending around cause they’re doing other things that are also very important. And she was just explaining to me the gravity of like, wow, I’m, I’m helping a family. Like, you know, navigate what might be arguably like the most critical or difficult decision that they may ever have to make a, and that is something that I’m sure they don’t have a chapter in a, in a book in Med school to kind of teach you how to do that. So how has that been for you and how have you helped younger physicians to sort of work through that?
Dr. Turner: 23:54 Well, to answer the second question first, how I help is by letting them know that we all struggle with it. You know, I’m three years out from residency. I still struggle with it. I think that I’ll probably struggle with in my entire career. And if I don’t, then I’ve lost the humility that helps me be good at my job. That’s absolutely right. So, you know, I, I try to normalize it honestly. And you know, also try to, I poke fun at this a little bit. So there’s something called the dunning Kruger effect, which is a, if you haven’t, if you don’t know what that is, please Google dunning Kruger effect. And look at the images. There’s this great image where it has basically experience on the x axis and confidence on the y axis. And, and as you start and you get some experience and you start to feel pretty good about what you do, your confidence skyrockets.
Dr. Turner: 24:37 Even they don’t have a lot of experience because you just don’t know what’s out there yet. Yeah. And then you get to the peak, which is called mount stupid. And from that point you’ve continued to fall. As you get more experience, your confidence drops. And so that, that, that curve right there is where imposter syndrome happens because you’ve had some things happen, you’ve potentially made some mistakes, you have a not performed the optimal anesthetic for, you know, a patient or whatever it happens to be. You don’t handle the conversation in the ICU. Well, and as that happens, you start to lose your confidence even though your experience and your knowledge are increasing and eventually you get enough experience and knowledge that there is light at the end of the tunnel. And it does start to get better. But I think even those doctors, you know, when they look back, they can tell you story after story after story of, of situations that weren’t optimal.
Dr. Turner: 25:25 They weren’t handled as well as they could have. And I think everybody suffers a little bit from imposter syndrome where they feel like they’re going to be caught as a fraud. And I think that that happens in a lot of areas in my life where, you know, people are asking me for advice on a given topic. And I think that the two ways to combat that are, to be honest, when you don’t know something and to ask for help when you’ve, it’s not in your wheelhouse. So I’m not afraid to ask other people for things or to say, hey, you know, that’s a great question. I don’t know the answer to that, even to a trainee. And that allows them to see that, hey, this person is an attending that I respect, I hope. And you know, they and I think that really helps them because they realize, oh, you know, he’s, I look up to that person and they are struggling with the same things that I struggle with. So that’s a big part of it for me as a, as an attending, honestly.
Justin: 26:17 Yeah. And I, you know, to be honest, I’ve had a lot of those similar experiences for me. It’s, you know, I’m sitting across the kitchen table from a couple of physicians or like a doctor, lawyer or like very, very smart people who are in many ways just wastewater than me. And I’m there, we’re talking about like personal things. We’re talking about their financial future and financial foundations and relationships and marriage and like, how do we thrive as a family? Yeah. I’m, I have that same moment of like, alright, are you asking my opinion about these things? Like I’ve been married for a year now and you know, and I have to remind myself, you know, I do have some technical proficiency in ways that they just have never had the time to study. But, but I also have a healthy sense of, wow, I have so much to learn and I learn things every day, even in things that I am an expert in. All the time I learn things and I’m, that’s one of the things that makes life beautiful, right? Is I completely agree. Being able to continually learn and grow and take new experiences and have them
Dr. Turner: 27:15 Part of your story yet. And I, in my experience, I think that knowledge and experience are very different than wisdom, right? So I think that people can ask for your advice, even if you’re not in their same exact situation or you haven’t had their exact same life experience. Yeah. You could still provide really good insight and, you know, speak some truth into their lives. I do think that you know, as you gain experience those areas that your, your advisory wisdom may change a little bit. But I think yeah, it’s constantly a struggle. You constantly feel like, am I the best person to really help sort sort out this problem? And I think it’s also helpful having people, colleagues, partners, spouses who around you and can tell you, look, you’re actually really good at that. I know that you don’t think that, I know that your self confidence is a Bismal, but that was actually really good what you did right there. And you know, and, and having that affirmation is important.
Justin: 28:08 Have you had mentors or colleagues who have been an important part of your journey and overcoming imposter syndrome, who have contributed to that for you?
Dr. Turner: 28:17 Yeah, I mean there’s certain people, you know, my section that have served as colleagues and mentors and even through training and there a big reason why I stayed at way. Cause I, I just loved working with them. I still love working with them. So they have been instrumental in helping me deal with, you know, some of this stuff and also showing me the ropes. And you know, when I have questions they can answer them. But at the same time they’ve supplied the same experience that I’ve just talked about for my residents where they were honest when they didn’t know things or when it wasn’t their wheelhouse. But yeah, absolutely. I think that mentoring goes, goes a long way in this area.
Justin: 28:57 And I know that one of the areas in which you mentor in addition to obviously the clinical ways is with finances and a lot of young doctors coming to you for advice and either in person or through the interwebs. And this is an area in which you’ve grown in a lot of, you know, you gained a lot of influence and I think your voice has been a really, it’s been a unique one and a valuable one. That’s one that a lot of people have benefited from. I think that’s one of the reasons that you and I connect so well is because it’s not all about like how do we stuff as much money in a bank account as possible, but understanding the physicians situation as a whole and looking at the whole human and knowing that we’re not just like economically maximizing machines. But but there’s there’s other parts of our, you know, mental and relational and spiritual and physical selves that are really important to bring along for the journey. So maybe talk a little bit about a conversation or two you’ve had recently with somebody who’s come to you looking for some input and one of those ways and if it’s interacted with finances or if it’s interacted with, you know, burnout or handling the stresses of in the rigors of training or, and, and what kind of advice were you able to offer in those instances?
Dr. Turner: 30:11 Yeah, so I think that the question that I get probably the most has to do with student loans. And so I’ve had actually back to back conversations where the right thing to do was the exact opposite for both of them. And it’s not really my style to tell people what to do. It’s my style to frame things in a way that they kind of understand the problem and then discuss the pros and cons, just like consenting a patient for a procedure. Right. I ultimately want them to make the decision. I just want them to have the information in order to do that. And so I had back to back days where two different residents came and asked me about putting extra money towards their loans, which first of all, if you’re able to put an extra money anywhere as a resident, you’re, you’re already winning.
Dr. Turner: 30:50 So I was really, I was really proud of these two residents to begin with. They both, they both were on the right track, but one of them had a very high student loan burden they were in repay. And so, you know, I talked to them about putting extra money towards that and what would happen to every dollar if they did that, given that they’re getting 50% of the interest subsidy. And you know, I talked about them getting 100% of the benefit if they put it somewhere else. And a, they also, the, the student loan debt burn wasn’t so high that they wouldn’t be able to refinance, repay these things when they finished. And so that was kind of one situation. And, and the other the person had, you know, very, very low amount of debt they were in repay, but their monthly payment was basically already covering their interest because it was, it was just not a lot of debt.
Dr. Turner: 31:34 And so I was trying to explain to them like, what, just go ahead and knock this out. Like, if that’s an important goal for you you know, what do you, what do you think about getting a guaranteed 6.8% on your return versus getting lucky and investing in the market and making better? And you know, so I think that it was just completely ironic to me that I happen to have these conversations back to back. You know, and, and basically what they came away with were, was the exact opposite advice. And the reason why is because their situations were not the same, right? So there’s never a one size fits all answer to most, you know, to any question really. Yeah.
Justin: 32:09 Yeah. That’s a great one. And let me just make a brief aside here. And if for any listeners out there who are wondering what the heck these terms are that we’re using, we’re going to do a an episode on student loans coming up in a few weeks. Hopefully our, we’re going to unpack what is, what does it mean to have student loans and what is the current state of student loans and for physicians and in the various career trajectories for anesthesia and pain, how might that play out? And it’s very important. You should either, you should either be crushing your loans or paying as little as possible to move towards forgiveness. And if you’re not doing one of those things actively having made that decision, you’re probably wasting a lot of money. So I wanna come back to that in the future, but just a little teaser, anybody out there who isn’t quite sure what their loan situation is, you either want to do one or the other.
Justin: 32:53 So it’s important to be thinking about that and it, and it gets, it gets complicated fast and very complicated. So I know why. So I’m glad I know someone like you. Yeah. And it’s funny because this is exactly what I was thinking about when he said, I’m absolutely, I would absolutely stand up in a crowded room and say I’m an expert in student loans. And yet still all the time after having done hundreds of these, I get things all the time that are just having me scratching my head and say, it really is. It’s insane. It’s, it’s so complicated. But I’m glad you’re doing a podcast and I look forward to listening to it. Yeah. And we may leverage some of our mutual friends to try to lend a little more insight. You should. Okay, cool. So in wrapping this up, there’s one other thing I want to talk about and this is something that you and I have talked about at length and it has to do with the financial planner engagement.
Justin: 33:41 And for a physician who is thinking about, you know, especially, I think it’s really valuable as we talked about as a younger physician, your focus is singular. It’s like PR usually like handle my loans until they’re gone. And then whenever that happens there’s this sort of the curtains lift. And then there’s this whole world of opportunity out there where there’s a lot of ways to do right or to go wrong. And that can be an opportune time to engage somebody who can help give you a framework to think like, what are the right questions to ask? How do I, what does it mean to build wealth? What kind of savings rate should I have? What does it mean to take advantage of pretax retirement accounts? What does it mean to have a conversation with my spouse about values and priorities? And like, where are we going to deploy this extra $2,000 a month that we’re about to find? And so in that context, talk a little bit for you about what you recommend in this you know, the gold standard that you talk about. What is the gold standard for financial advisors? And if I’m looking for an advisor how do I know if they meet that criteria? Sure. Well, they follow up the first column each made. So I completely agree
Dr. Turner: 34:46 In the way that I talk about this is that I break physicians up into one of three groups. So the first group is the do it yourself group that tends to, you know, want to learn about the stuff, read about it on their own and figure it out and they don’t want a ton of help. That said, that group’s very small there. Two other groups, one of them is the dot. Your i’s cross your t’s group where they have enough knowledge that they may be able to do it on their own, but they really want a professional to take a look, sit down, ask questions and hash it out and make sure they’re not doing anything stupid with their money that they’re making, you know, smart financial decisions and that it reflects the values that they have. And the third group, which is rather large, particularly in the medical community, is the outsourced group where it’s like their lawn care or their childcare or their groceries, they, they just want someone else to deal with that stuff cause they don’t feel like they have the time to do it themselves.
Dr. Turner: 35:35 Those that second and third group are rather, and for those people that could really benefit from having a financial planner involved in their life. And so the question becomes, well, who do you ask for help? And that is a challenge because really until you know a good amount about personal finance, it is extremely challenging to know what a good advisor looks like, what a good model looks like, and to have a sense for where to get that advice. And so what I try to do on my website is provide a structure and again, like I said earlier, there’s not a one size fits all thing, you know, for anybody, for any personal finance question that said I think that the, the gold standard model produces the least amount of conflict from the onset or the start of the conversation. So I have basically four criteria for this.
Dr. Turner: 36:24 Fee only. Meaning that the financial advisor does not make money from commissions. The alternate to that would be a fee based where you do make money from a commissions. So fee only fiduciary, meaning that they are legally or ethically bound to put you first as the a client, which is actually really sad that I have to feel like I mentioned that because that implies that there are people out there that don’t do that. The third thing is experience working with people like you. So in this case, doctors and then I, I’m a big proponent of flat fee models because it, it decreases the risk for conflict. When you’re getting financial advice, I guess we can start there and tease it out a bit.
Justin: 37:03 Yeah, sure. So I think and you and I, so when we first met Jimmy, it was at a fin con a year and a half ago now, which is this fin con is his financial content conference where it’s bloggers and writers and people who produce all sorts of personal finance content. And, and I met you there and we were having this spirited discussion about fees and about what does it mean to, you know, charge a fair fee and what is it, what is an optimal fee model look like? And at that time, my, from quantify planning, it was functioning in a different fee model. That was, you know, honestly, like very closely related and all the fees Kinda calculate to the same thing roughly. But, but now I’ve evolved a bit more in my thinking due to yours and some other input. So maybe talk a little bit about that discussion that you and I had and with regards to cap fees and net worth pricing versus AUM and what, what does that, what do these words mean and how should I be thinking about it as a physician who’s maybe gonna hire somebody?
Justin: 38:08 Sure. So
Dr. Turner: 38:09 I think that your job as a client, the physician looking for financial advice, your job is to get the best advice that you can for the fairest price. And so let’s just say the cheapest price,
Justin: 38:23 That’s what I would be doing. If I’m consumer, I want to get the most and pay the least. That’s, that’s economics.
Dr. Turner: 38:28 I can agree to that. Yeah, yeah. Yeah. So that’s, that’s exactly your goal. And so the question becomes like, well, how do I make that? I’m doing that. And again, it’s challenging because when I met you at fin con, you know, we went out to lunch, I got to know you, I learned about your family, I realized that you’re an awesome guy and someone that I would absolutely trust to give financial advice from, but not everybody knows that because they don’t know you, you know, they go to your website and they see, you know, pictures or whatever. Like they don’t know that because they haven’t had a chance to sit down with someone like you. And so the first part becomes like, is this someone I can trust? And I think that your responsibility is to whittle it down to a select group of people and then to choose somebody from that select group to, to be the person for you.
Dr. Turner: 39:09 And, and the way to whittle that down is through these, you know, do that gold criteria. Right. But yeah, the most common model in this, this occurs in fee only advising too, so you can not make money from commissions and still have this model is called an AUM or an assets under management model. The idea there being that the person managing your money is going to take a percentage of your assets that are being managed each year. So if you have $1 million in money that they’re managing, then they’re going to be paid $10,000 from your assets. It’s going be swept out of your, your accounts each year. If you have $2 million in is 20 grand, $3 million is 30 grand, so on and so forth. And so it gets more expensive as you go, which begs one question, is it harder to do as the, as the assets increase and that there are various opinions out there.
Dr. Turner: 39:58 And then the the second thing is that, does that model introduce potential conflicts? So what if you want to pay down your mortgage or you want to pay down your student loans, or you want to invest in a personal business and you’re putting your money that could be going towards investments towards those things. And you asked me the advisor who, who’s being paid in that model, what you should do? Well, there’s a conflict. Now the person may be a great human being and they may rate rise above the conflict, but the conflict exists because you’re not putting money towards your assets that they would manage and they take a percentage up to get paid. So they would be inclined to tell you not to pay down your mortgage and not to pay off your student loans and not to invest in real estate or to take social security earlier, even if those things aren’t best for you. Now will they do that? I don’t know. You know, human ethics is a complicated subject, but they are going to have a, a thought in the back of their heads that I’m gonna make less money if I recommend this practice. Yeah. So,
Justin: 40:54 And to be clear, let’s, let’s put some numbers to this. So for you, if you’ve got half a million dollars in the bank and I am your money manager, financial planner, whatever you wanna call it, hopefully I’m doing financial planning in addition to just running your portfolio because you can get portfolio management out there for 20 or 30 basis points. So I need to be doing planning for you. But if I, if you’ve got half a million and I’m charging you 1%, I’m making $5,000 a year. And if you have some big event is say like you sell your blog and you made $250,000 and you had this big windfall, me as your financial planner. If I’m managing your assets and you’ve got this 250 k I’m looking at that thinking that’s another $2,500 a year of revenue, me the advisor. And so my incentive to give you advice is to say, Hey Jimmy, you should put this 250 k in your investment account that I am going to continue to carefully manage for you.
Justin: 41:43 And that may be the right answer, but that is what ivy advisor am incented to tell you. Where as if you’re like, listen, I hate debt. I want to put half towards my student loans and half towards my mortgage, the net increase to my revenue. If you do that is zero. Right? And so while for you that might be the optimal thing based on your personality and your and your wife’s values. For me that’s, and I might, you know, I might be able to give you that advice if I know you and care about you and I’m a good guy, but the fee model is conflicted at that point. With debt pay down specifically debt pay down is I think one of the most popular areas of conflict, especially for early career attendings who are trying to pay down a mortgage, trying to pay down student loans because the financial advisor in many cases just doesn’t have an alignment of interests
Dr. Turner: 42:30 In that situation. I can’t tell you how common this is. I cannot tell you the number of friends that I have who have a financial advisor who is offering financial planning services. They operate under an AUM and they still have student loans five or 10 years out from training. And if there’s always some excuse for some, you know, well, it’s only a 3% and I can earn more in the market. And I’m not arguing that you can’t leverage your debt and make more than the market. I’m not saying that’s wrong, but when you still have student loans just by earning hundreds of thousands of dollars and I know what the numbers are and they’re not that high and you still have them 10 years later, you have to wonder why you keep getting that advice. And so unfortunately it’s, it’s really, really common and I have this conversation all the time.
Dr. Turner: 43:12 And so that flat fee model where you avoid some of that, the best way to do that is to, to do it under net worth. So, you know, which is the model that you’ve recently come through. And I love that because you get paid more if they do something right and put it in their investments or if they pay off their debt, either way, their net worth is increasing by doing something that’s financially wise. And Yeah, you should get, you should get paid for offering that advice. But it should also be something that’s not conflicted. So you’re not one way or the other going to say, well, I prefer for you to do this. Knowing in the back of your mind you’re gonna make more money from it because you make money from both. And so as long as your overall price is still fair, I think that that’s probably the, the least conflicted way to do it.
Justin: 43:54 Yeah, I agree. And so to be clear, if we go back to our original example of you’ve got half a million that I’m managing for you and you’ve got some net worth in your home because you’ve got a mortgage and you’ve got student debt and me, my job, the number that I’m managing and that I’m incented to manage is your net worth, meaning all the stuff that you own, the value in your home, the value in your portfolio, the value in your retirement accounts, minus everything that you owe, your student loans, your mortgage, your credit cards, all that. So as an advisor who’s managing the big picture number, I e net worth, I’m incented to, I should say I’m in different, if we invest the money or if we pay down the number, the bottom line net worth number is impacted identically. And so whatever the scale is for how I get paid based on your net worth you know, if you bump up into another bracket, if you have a 250 k windfall, your net worth goes up 250 k whether or not you invest it or pay down debt or whatever. And so the, the fee in that instance is you know, is going to move regardless of kind of what I tell you to do. Yeah. The counterpoint to that might be the AUM guy would say, listen, it’s actually cheaper. It’s cheaper for me because every time your net worth goes up, you know, my fee isn’t going up. So in that instance, the net worth fee actually would go up either way.
Dr. Turner: 45:14 Right? So I, I’d actually fight back on that because my net worth started at negative $210,000 and I knew others, you have negative half a million dollars in net worth. Yep. I know them too. And so in order for them to go to the next bracket, they’re starting 250 to $500,000 lower. That’s right. Then the assets under management model, which starts at zero. So the brackets actually are, you know, if you adjust them for that starting point you can, you can argue that the assets under management model is not cheaper.
Justin: 45:45 Yeah, that’s true. And I don’t think that at the end of the day [inaudible] I obviously pick this model cause I like it the best. And for somebody who has got a net worth of a negative half a million, they’re getting it like the deal of a lifetime value because they’re not even going to hit the first break point until they add $1 million of net worth and go from negative 500 k to positive 500 k. That’s exactly right. And so I think if there’s anybody out there who’s listening, he was an attending who’s got like negative 300 and negative 500 and net worth you should run, don’t walk, but run to your nearest Justin Harvey’s your guy. Yeah. Yeah. and I think that that’s absolutely a resource that would pay for itself in spades. Oh yeah.
Dr. Turner: 46:25 And, and I, I completely agree in particularly for those, those two groups, which is of physicians the dot. The I’s cross the t’s and outsource group. I mean those which is the lion’s share of doctors these people need help and they need to get it at a fair price, but they also need to get it, you know, without the conflict if it’s possible.
Justin: 46:42 Yeah. Right. And then I would argue one of the biggest benefits of working with a planet, and we’ll close on this one of the biggest benefits is not you know, the sort of the economic optimization, all of that is a significant benefit. And I would argue it’s not even the technical expertise, although that is definitely one of the, probably top two. But I think it is a good adviser is going to help you live a life intentionally that reflects your values with your money, with your time in your family, with your relationships that is going to ultimately just make you happier. So I like to, one of the ways that I can frame this for people is why would you not pay somebody five or seven or $10,000? Granted, that’s a lot. But if money is not incrementally making you happier, and you can spend that in a way that is going to bring hopefully harmony in your marriage and a conversation about common vision and values with your spouse and give you insight for how you want to deploy money with generosity and supporting charitable institutions that you like. And also gonna worry about all this stuff that you don’t want to have to worry about from like a service standpoint, like opening accounts and managing investments and making sure that you don’t step on one of those land mines of making a big mistake. The, the peace of mind and the sort of the personal being able to achieve personal fulfillment with somebody who’s going to show you the way, in my opinion, is the most valuable part of this.
Dr. Turner: 48:09 Oh No, I, and I agree. I, I, I think that, you know, you have to separate these conversations. So because, because the fee models tend to be based on assets or investment management, people focus on that. But there is the other financial planning piece where you have a financial planner who’s available for, you know, conflicts within the marriage about how to spend the money. You’re saved the money and being a, you know, a third person to bounce ideas off of. In addition to that, you also have, you know, changes in life, right? When someone dies or someone retires or these big moments that happen and what to do with the money or when you, you know, you inherit money from your parents when they die. You know, there’s so many different situations where having that sounding board would be extremely helpful. Yeah. And you know that that’s a certainly a service that’s provided that’s off, that’s often not talked about enough.
Justin: 49:01 Yeah. And to be honest, you know, I, I started working with a client a couple of weeks ago and had an intro conversation with these two and they, one of the things they were sharing in the intro discussion was, you know, we feel like we want to be, we want to be more generous with the money that we have. Now this is one thing that this does thing your net worth. And so as an advisor, I’m actually incented to tell you to not give away your money, but I was telling him this is one of the things that makes my job the best. Cause I can help you be strategic and sacrificially generous if that’s what you want. If you said, I want to give away all my money and fire Justin cause we can’t afford them anymore, I’m going to just tell you right now that I would love to help you do that because there’s not enough people out there like that.
Justin: 49:39 And I think that’s, you know an example that is really challenging to me. But working with these guys and starting this conversation and being able to see the way that they want to positively impact their community and the people around them, and to do that like linked arm and arm the this husband and wife together to be able to take part in that journey for me, I just think is absolutely the best job in the world. And clients like that. Yeah. I just, I tend to really resonate with that mission and to help them develop and mature those ideas to like really maximize what they see as their vision for the future. That is something where I just, I have to pinch myself and I can’t believe I get paid to do this. It’s like the best thing ever.
Dr. Turner: 50:19 That’s, that’s great. And I mean, I think it’s wonderful that they’re on the same page and able to do that and have you to help them with it. So that’s, that’s a winning situation.
Justin: 50:25 Yeah. So I’m, any
Dr. Turner: 50:28 Words in parting that you want to leave with our listeners? Gosh, it’s July. So I guess the advice that I would give is that whatever transition you’ve happened to have just gone through that it will get better. That all of us have been there. We’ve all felt inadequate and fraud and if you are burned out doctor, there are ways out of it and you can provide yourself options through financial independence. So I think that getting on the same page with the people around you that you love is important and having a financial planner that can help you do that if that’s, if you’re in one of those two groups is, is a helpful way to achieve those goals. Cool.
Speaker 1: 51:04 Well leave it with that. Jimmy Turner, thank you very much for your time today. Thanks for having me on. Justin had a great time. It’s been a pleasure. Hey Justin here, this may shock you to learn, but I am actually not a full time podcaster. I also run a financial planning company called quantify planning, where I work closely with anesthesia and paint docs to build and implement customized financial plans. If you’re interested in working with a financial planner who knows many of the ins and outs of your profession, shoot me an email or head on over to quantify planning.com for more information. If you’re a resident or fellow, I can also offer you a free student loan analysis if you’re interested, but there might be a waiting list, so check out the link over there to see if you’re interested in learning more about the topics we discussed today. Head over to anesthesia, success.com to join our community of residents and attendings and others to ask a question or get more free resources. If and only if you liked this episode, please leave us a review and subscribe. Thank you very much for listening to the anesthesia success podcast.