If you read through my list of physician finance bloggers, you'll note that shift-based specialists like anesthesiologists, radiologists and emergency physicians are over-represented.
Where are the primary care physicians? They do not blog in proportion to the half of the physician work force they comprise, leaving a vacuum of first person testimony as to how such clinicians might cut back or tailor their strategy to achieve Financial Independence (FI).
I recently received an email from a pediatrician whose life resonates with the experiences and stories this blog explores, but who can't seem to find a playbook for cutting back that fits his precise situation.
Per his email, it's barely June and he's already dreading next winter. I recall similar anticipatory anxiety at my low point as well.
Dr. Pediatric Business Owner (PBO) is 40-something, married with kids, and struggling with mid-career burnout. Add to this a recent diagnosis of illness in a family member that will require greater time commitment on his part at home. The essential details follow:
- Part-owner of his practice (not an employee) for over a decade
- Works 4 clinic days/week + 1 weekend clinic day/month
- Day off is spent on catch-up charting 🙁
- Already employs and supervises mid-levels (NPs/PAs) in clinic
Dr. PBO's fears:
- Cutting back 1-2 more days will simply condense workload into fewer days resulting in overwhelming lab follow-ups, referrals, refills, calls.
- Due to partial practice ownership this job must be "all or nothing," and the current version of "all" is unsustainable.
Begin At The Beginning
Burnout indicates that your personal exchange rate of time for money has been altered. Four days a week in clinic (plus a fifth day to catch up on charts) used to be worth the income for Dr. PBO - now it's not.
This powerful feeling can be harnessed for change.
In the thick of burnout it can be easy to feel stuck and helpless; certain universal baby steps can help restore a sense of incremental forward motion.
Cutting back is a journey like any other. You need a starting point and a destination.
Figure Out Your Starting Point
Before Dr. PBO can begin assuming control of his time, he needs to understand his financial life. He needs to make a list of his assets, his debts, and tally up the difference to determine if he has a positive or negative net worth.
Define Your Destination
He might also benefit from figuring out his FI number to help determine the slope of his glide path to cutting back.
The math made popular by most FI bloggers, which I will not dig into here, is to take your annual expenses, multiply by 24, and call that your FI number.
Many physician finance bloggers, including Wealthy Doc, Gasem and Physician on Fire, feel this number does not adequately mitigate risk and would argue for 30 to 33 times your annual expenses as a safer number if early retirement is anticipated.
I tend to side with the latter bloggers, to view my FI number as a continuum - reaching 24X was the inflection point that allowed me to cut back and feel comfort in taking risks to align my job more fully with my desired life. Reaching 30-33X is my destination.
Decide If You Will Use Turbo Boost
Conventional wisdom is to sock away a set amount each year until age 65.
In contrast, those unconventional souls pursuing financial independence often front-load their the young and hungry years of their career by working more and radically boost their savings rate. As an irresistably strained analogy to the 1980's television show Knight Rider, supersavers use turbo boost.
These early contributions combined with the power of compound interest enable supersavers choices in their later career:
- They can reduce the depleting aspects of work (nights, weekends, holidays, call) accepting a commensurate reduction in income (glide path out of pain).
- They can reduce their overall clinical hours (glide path out of medicine).
- They can take per diem work on their terms, at their convenience (indulge the remunerative hobby of medicine).
- They can opt out of medicine entirely (The Def Leppard better to burn out strategy)
- They can rapidly build a large nest egg until it reaches a defined threshold, then reduce their clinical load to subsistence levels while their nest egg grows untouched (The Def Leppard better to fade away strategy).
Settle On A Destination
Choosing your FI number is only a small portion of the task necessary to define your destination. Beyond how you plan to pay for your life, you need to design a life worth living!
A second (often more pleasant) set of steps for Dr. PBO is to create an Investor Policy Statement for his time. This is a way to define his values and envision his ideal life, to know where precisely he wants to go.
- What activities is he currently unable to participate in that he values?
- What is the right balance between time with life partner, time with children, time with friends/extended family and time alone?
- How much time should be spent on fitness, skills mastery or deepening other meaningful relationships?
- Which milestone events is he missing out on his current life that he would attend in his ideal life?
- How much time with kids is the right amount? Half a day with my kids (and critically, half a day without them) is my perfect recipe. My friends' needs vary from never spending a night apart to sending them to boarding school.
Many folks panic at this phase and substitute fantasies for proven activities. "I'd improve my golf game!" they insist, although they currently golf twice a year, only on holidays.
Instead, it may be preferable to set modest goals: "I'll identify a fitness or skill activity I enjoy and dedicate 4 hours a week to it, starting with golf." Commit now to the interest, alter the activity or titrate the precise amount of time later.
Once Dr. PBO has assessed his financial situation, determined his starting point and defined his destination he can make some informed choices on how to proceed. We'll explore his options in our next installment.