What’s Your Safe Withdrawal Rate For Sanity?

crispydoc Uncategorized 8 Comments

I've been inspired by my fellow physician finance bloggers lately.

The Frugal Physician announced that despite recently graduating residency and paying off her student loans, she was cutting back to four days a week in the clinic.

Her post dovetailed with a guest post at Physician on Fire by Dr. Dawn Baker (of Practice Balance and Stealth Wealth Family blogs) who described how a tactfully delivered and expertly timed request for a 9 month sabbatical was approved by her employer.

Every time a physician expands the boundaries of what a career in medicine can look like, an angel gets his wings (see video below):

On reading their posts, my train of thought left the station (and the rails) in the following sequence:

  1. Both bloggers are parents seeking increased presence in the life of their young children.
  2. When our kids were young, we were driven insane by the dual demands of medical careers and parenting.
  3. Our experiences reinforced the sense that you are given a finite supply of sanity at birth intended to last the duration of life.
  4. We each had acquaintances who served as cautionary tales of what happened to people who consumed their allotment of sanity too early.
  5. We decided to proactively take steps in order to reduce the depletion of our remaining stores of sanity.

Becoming Super Savers

We proceeded on a number of fronts.

We dropped the rugged individualist masks that residency had bred us to wear and accepted help (from family and community) when it was offered.

We hired help when we needed a break from the kids or a chance to reconnect in their absence.

Over a period of years, both of us progressively reduced our clinical commitments to tilt work-life balance solidly in favor of life.

As we got better at navigating family logistics and distinguishing needs from wants, we got better at conserving our sanity.

Often, sanity was preserved by spending money for services such as housecleaning or child care.

We concluded we'd never miss the money we spent, and we'd never regain the sanity we lost.

Our origins as super-savers of income derived directly from our origins as super-savers of sanity.

While we did not become sanity hoarders, we decided to set a low threshold for spending on services that made our lives easier and raised the quality of our time together. We had no problem driving beater cars or making comparable small sacrifices if the money we saved was put toward services we valued.

Sequence Of Returns Risk (SORR) Events

As life progressed, we realized that certain milestone events (observed in our lives and those of loved ones) jeopardized that precious stash of sanity.

Some events could be considered risks inherent to living (as singer Warren Zevon eloquently puts it, Life'll kill ya).

Others arrived unexpectedly in the moment, but appeared entirely predictable in retrospect:

Having a child, and then another.

Dealing with a child's illness or advocating for a child with special needs.

Struggling with burnout in medicine.

Balancing claims imposed by extended family with nuclear family needs.

Facing a first malpractice lawsuit.

Dealing with illness and frailty in the older generation.

Just like a down market early in retirement has the potential to destroy a portfolio, any single SORR event has the potential to completely exhaust our sanity.

The harsh reality is that multiple events may overlap at any given time.

YOU Determine Your Safe Withdrawal Rate For Sanity

Some people hurtle toward Financial Independence by front-loading their work years when they are young and hungry.

Others scale back to address competing family priorities that appear in those early work years.

Some become super-savers by necessity, constitution or through the benefit of helpful family money blueprints.

Others manage to turn the ocean liner around later in life after taking some punches and reading some books and blogs.

Personal Finance and Personal Sanity Are Analogous Concepts

You get to set the degree of sanity you need to function optimally.

You decide how quickly or slowly you plan to deplete your reserve.

You adapt when curveballs appear and one or more SORR events threaten to undermine your sanity.

The freedom to choose is liberating and terrifying.

But make no mistake that you are choosing every day.

By omission or commission.

Explicitly or implicitly.

The sooner you assume responsibility for the choices you make, the sooner the life you lead can become the life you want.

The constraints we assume a medical career demands of us are increasingly being shown to be self-imposed.

Role models for unconventional medical careers exist. You just need to know where to look.

Comments 8

  1. Well put CD. The purpose of life is not to collect the most amount of things or to have the highest bank account. It is to fill your life with experiences and, as you put it, preserve your sanity.

  2. I think the correlation between sanity and wealth are independent, and linked only in the mind of the insane. Sanity is based in fear. Fear of missing out, fear of failure, fear of being found out as a fraud, fear of being human. These fears are linked in attempting to be something you are not in reality. Because you make half a mil a year does not mean you get to live like you make a mil. If you live like a mil a year person on half a mil income you live in fear. You live as a fraud. The bigger the fraud the harder the fall. Solution: don’t live as a fraud, instead live consistent with your reality. If you live “as is” as opposed to “as if” your effectiveness is multiplied.

    Accumulation of wealth is a different process but related. If you live a 1M life on 0.5M income you’ll never be wealthy. So a right sized life is paramount. If you live a 400K life on a 500K income you live in the luxury of excess. It’s in that environment compounding and risk taking can occur. Beyond that attaining wealth is merely application of a wealth accumulation process. Success will occur to the extent the process is properly applied. Success will not occur to the extent the process is mutilated and over sold. I read PoF’s Business Insider article and his final pre-retirement accumulation was 36x. A very different number than 25x yet he was hawking 25x in the article. I think 36-40x is the right number. There is considerable SOR risk in 25x, far less risk in 36x. Risk breeds fear and fear destroys sanity.

    The take away to live in sanity, live in parsimony and don’t play small ball with your future. 25x is small ball

    1. Post

      You don’t just order off the menu, Dawn, you bring your own ingredients and teach the chef how to use them.
      Thanks for making your unconventional path public so we can borrow from your playbook.

  3. I read the malpractice article but…. how did it end?

    I would be interested in knowing your insight during and after its settlement/verdict and how it affected your career/perception of life.

    For some reason we shy from those stories which are critical in understanding the cruel environment we work in.

    But as with the FI (RE) business, sharing is teaching, and maybe cathartic.

    1. Post


      Thanks for asking – I’ll write a post to answer your very reasonable question about the malpractice case, and the perspective that developed as a result. It’s hard heading into work not knowing which days will turn out to be cruel or kind. Those butterflies in my stomach that so excited me as a young and hungry doc? The retrospectoscope is now calling them IBS. If only we’d seen it coming…



      1. Thank you CD.
        We shy away from communicating about those. Truth is, they are part of the business.
        The more we share, the easier it is for others to deal with it in a way that is not traumatic.
        We shouldn’t be ashamed, though the psychological make up of docs makes them vulnerable to self defeat and self recrimination when our adversaries, the lawyers are, for the most part on the plaintiff side, just pyschopaths hunting for money no matter the cost.

  4. “ The sooner you assume responsibility for the choices you make, the sooner the life you lead can become the life you want.

    “The constraints we assume a medical career demands of us are increasingly being shown to be self-imposed.”

    Amen, Amen, and Amen!

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