Hatton1 is an internet famous OB/GYN best known for sharing her investing wisdom over many years on the WCI forum.
My finest day as an aspiring physician finance blogger was finding she'd commented on my site - the newbie's equivalent to becoming a made man in the mafia.
She blogs at Doctor Of Finance MD, where her experiences as a financially successful investor, a business-savvy physician running her own practice, and most recently her position as a hospital employee continue to burnish her legacy as a trusted voice in the physician finance community.
1. What is your specialty? OB/GYN
1a. How many years of residency/fellowship did you complete? 4
1b. How old were you when you began to cut back? 50
1c. How many years out after completing training was this? 20
2. What did your parents do for their livelihood?
My mother was a homemaker. My Dad spent 20 years active duty in the Army. He then worked another 20 years for the Army as a civilian (while getting retirement pay from the army).
2b. Would you characterize your upbringing as financially secure or insecure? Secure.
2c. How did your upbringing affect the money blueprint you inherited - both positive and negative?
My father was very frugal. He saved 50% of his paycheck. (My parents married late. My mother was widowed at 35. She married my Dad at 39. He was 40. I think he had not focused on saving prior to taking on a wife and what became 3 kids.) He stuffed money into boxes every week to pay for Christmas and vacations. He bought saving bonds and later CDs.
3. What motivated you to cut back? [Family / burnout / relationship / divorce / lawsuit/ other?]
Early in my practice my focus was simply financial security. I wanted to save enough to be able to take care of myself. I began to realize that I was accumulating enough money that I could totally retire or just cut back. I also went through a malpractice trial.
4. What were the financial implications of cutting back?
I started making a lot less money when I quit OB. You have to mentally adjust from paying things out of practice cashflow or a paycheck to thinking it is ok to take some money from your taxable account.
4b. Did you downsize home or lifestyle? No.
4c. Slow your progress to retirement? Describe your thought process in making these tradeoffs.
When I decided to quit OB I could have totally retired. I had > 5 million in financial assets. I could live off the dividends/interest income. In retrospect I believe I could have quit OB earlier if I had really thought about it.
5. How did colleagues react to your decision?
Mixed. The OBs in my call group were annoyed. Some secretly asked me how I did it. What calculator did I use.
5b. How did you respond?
I told them I used a quicken spreadsheet to look at expenses that would drop off when I quit OB (mainly malpractice expense). I looked at my dividends and interest income and my personal expenses.
5c. Was your family supportive or critical? Partner? Parents? Children?
My husband thought it was great. My brothers were very supportive.
6. What have been the main benefits of your decision to cut back?
I quit working weekends and holidays. I quit running to the hospital at odd hours. Stress declined. No phone calls.
7. Main drawbacks?
Less income. If you start cutting back you need to realize this. Your investments will compound much more than your work income however.
8. Did you fear your procedural or clinical skills might decline? How did you address this concern?
Yes this is a concern that I have. Not so much cognitive skills (at least not yet) but some procedural skills. I am trying to limit my surgery to minor cases at this time.
9. If you are honest, what percent of your identity resides in being a physician? How did cutting back affect your self-image, and how did you cope?
Some. I am still trying to figure this one out.
10. If you had not gone into medicine, what alternate career might you have pursued?
Finance or CFP come to mind. Idealistically I would of loved to of been a writer for National Geographic.
11. What activities have begun to fill your time since you cut back?
I really do not know how I ever worked as much as I did. I still seem to have no time. Writing a blog takes up some time. I am exercising quite a bit also.
12. If approaching retirement, what activities have you begun to prioritize outside of medicine so that you retire to something?
I might be getting remarried. Maybe.
13. Did you front-load your working and savings, or did you adopt a reduced clinical load early in your career? What was the advantage of the route you chose? What would you do differently if you were graduating residency today?
I opened my own practice at 36. One advantage to that was I was able to take a full day off per week. This helped keep me stay sane in an insane time. I very much front loaded my savings. I did not save when a resident but I avoided credit card debt. I saved a huge amount in my late 30s and early 40s. I did not panic and I continue to amazed at the compounding gifts. Not sure what I would do differently if coming out of residency today. I would be forced to become an expert on student loan strategies.
Thanks for taking the time!
A few observations on Hatton1's replies:
- By eliminating OB from her practice, she reclaimed her nights and weekends and removed a major stressor from her medical career.
- A frugal family blueprint for money seems to be a recurring theme for Hatton1 and Vagabond MD. For those of us who spawn, our model of wealth accumulation has far-reaching consequences.
- Her supportive family and partner offset skeptical colleagues as she reduces her clinical commitment. Build a support network outside of medicine!
- Front-loading savings as a young workhorse creates far-reaching benefits by the time you head out to pasture.
- Finally, perhaps the optimal time to enjoy a relationships is after cutting back! Wishing you a wonderful relationship, Hatton1, married or otherwise!