Docs Who Cut Back #2: Hatton1

crispydoc Uncategorized 19 Comments

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!

Comments 19

  1. I enjoy this series, Crispy Doc. Particularly given that I am considering doing this even early in my career (wouldn’t/couldn’t happen for another year and a half probably – when all of our our non-mortgage debt is gone).

    It’s interesting to see the various reasons why people choose to cut back, but so far it seems like they have both found better work-life balance by doing it (Even if it seems like things still stay busy).

    Thanks for taking part, Hatton! Always a joy to read what you write.

    TPP

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      There’s a trend to understanding that one’s highest priorities are in the home, not the hospital, which is refreshing.

      Lots of older docs get that fist-shaking “You kids get off my lawn” tone of voice when speaking of younger doctors and their inability to pay dues or absorb pain.

      I tend to think, what took us so long as a profession? How many absences from milestone events in our kids’ lives, failed relationships and physician suicides were written off as a the cost of practicing medicine the way we’d always done it?

      I’m thrilled to hear the series has relevance for you, TPP, because it’s meant for folks who want to see what plays others have used successfully to get them to the life they want to lead.

      I’m grateful to Vagabond and Hatton1 for getting the series off to as strong a start as I could hope for!

      Fondly,

      CD

  2. Two great examples of the benefits of cutting back in a row.

    Great series Crispy Doc. Gives proof of concept that becoming FI and cutting back can allow you to keep your sanity.

    It is funny but yeah there was validation that my blog too actually had validation when some of the internet famous commenters stopped by to drop a comment.

    Hopefully one day other bloggers will feel the same way about us when we drop some words/knowledge in their comment box 🙂 lol

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  3. I find it fascinating that every specialty has different hurdles to clear to fashion a unique career path whether that be to incorporate less clinical time, more international work, more administrative effort, etc. The common bond seems to hitch your wagon to a lifestyle that allows for a decreased income with no decreased happiness.

    Great series, CrispyDoc!

  4. My girl Hatton1 has it going on! Leading the charge into the luxury of medical oblivion. Bountiful experience actually lived, not just projection, is invaluable.

  5. Thanks for the excellent interview. I appreciate Hatton1’s perspective. As a mid-career physician I get a sneak peek into my future self and plan on how I’d want to structure my retirement. I think the benefit of these interviews is to show that there are alternatives to a conventional medical career. It is possible to carve your own path.

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      Could not agree more, MD. The more folks we can hold up as carving their own path in medicine, the more we can create the flexible paths we seek.

      The other day my wife lamented that we are middle-aged (lamenting is a favorite past-time for her). I corrected her, noting that based on average life expectancies, we are beyond the middle. Contrary to what you’d think, this made us all the more grateful for choosing a non-traditional path earlier.

      Thanks for stopping by to comment, my friend.

      Fondly,

      CD

  6. I think this interview series totally rocks. It lets me know we’re not alone and it’s nice to see the varied paths we’re all taking to optimize our life styles. Thanks for leading the charge on this CD!

  7. I am amazed at Hatton’s retirement portfolio (I think she mentioned the dollar amount somewhere as 8 mm or so). Even saving 100k a year starting in one’s thirties compounding at 7.5% would make that a stretch. Super impressive.

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      Hatton1 is the hardest working woman in medicine as far as I’m concerned – I think this kind of net worth only happens with a very low burn lifestyle/LCOL geography, a tremendous savings rate at the outset that is continued over a career, and a work ethic that has you constantly contributing to the nest egg without ever depleting it. The fact that she is continuing to work after she’s won the game tells me that her makeup is perfectly designed for wealth accumulation.

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