{"id":1236,"date":"2020-05-13T23:46:13","date_gmt":"2020-05-14T05:46:13","guid":{"rendered":"https:\/\/modernfimily.com\/?p=1236"},"modified":"2020-06-04T22:22:03","modified_gmt":"2020-06-05T04:22:03","slug":"fire-community-guest-interview-7","status":"publish","type":"post","link":"https:\/\/modernfimily.com\/fire-community-guest-interview-7\/","title":{"rendered":"FIRE Community Guest Interview #7: Medical Professional Family With 3 Kiddos In The Pursuit of FIRE"},"content":{"rendered":"

It\u2019s that time of the year for the next installment of the FIRE Community Interview Series!<\/p>\n

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financial independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones,\u00a0please reach out to the Modern Fimily!<\/a>\u00a0You can\u00a0check out the previous FIRE Community Guest Interviews here<\/a>.<\/p>\n

I am so excited to have Steph from @prescriptions_and_paychecks<\/a> on to tackle our interview questions this week.\u00a0 Steph was one of the first accounts I had connected with when we started our Instagram account and I love her go-getter attitude of paying off massive student loan debt that she and her husband took on combined with their FIRE goals to have $70,000 in annual passive income.\u00a0 Shes a Physician’s Assistant and paid off $166,000 in student loans and her hubby is a Pharmacist who started off with $135,000 in student loans and is now down to $75,000.\u00a0 Oh yea, and they have 3 cutie young kiddos and an au pair!\u00a0 She’s extremely open with her numbers and their journey which I find so refreshing.<\/p>\n

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie cutter way to FI.\u00a0 If you have any follow up questions or would like to get in touch with this awesome lady, please leave a comment below.\u00a0 Steph, without further ado, take it away!<\/p>\n

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1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?<\/strong><\/div>\n<\/div>\n
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Hi I\u2019m\u00a0Steph<\/span>! I am a Physician Assistant working in Medical Dermatology. I\u2019m 32 years old, married with 3 kids under 5! My husband is a Pharmacist with a dual PharmD\/MBA (and a meme lord).<\/div>\n
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I never really had much interest in personal finance until I got serious about paying off my student loans from PA school. I found the Debt Free Community on Instagram and was introduced to so many different personal finance resources! \u00a0I first learned about the idea of financial independence while exploring some new podcasts in the spring of 2018. I started listening to The Mad Fientist and ChooseFI and quickly went down the FI rabbit hole.<\/div>\n
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2. When in your journey did you realize financial independence\u00a0was actually possible?\u00a0 Was that the original goal at the beginning?<\/strong><\/div>\n<\/div>\n
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It seemed like a pipe dream when I first started thinking about it. I knew I didn\u2019t want to live like Mr. Money Mustache just to retire early. Then I ran the numbers. I actually made a timeline of debt payoff, and estimated the values of our 401ks and investments. With my rough estimates, we would be able to have absolutely zero debt (including our mortgage) and be financially independent within 10 years. I was blown away!! My husband didn’t believe me, so I made a more detailed spreadsheet and ran the numbers again. We could have over a million dollar net worth and quit working entirely by my 40th birthday (without eating rice and beans for dinner every night).<\/div>\n
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Originally, the goal was to see how early we could\u00a0potentially retire. After\u00a0taking a step back we\u2019ve re-calibrated and adjusted our goals to be more in line\u00a0with Financial\u00a0Independence, with less\u00a0emphasis on Early Retirement.<\/div>\n
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3.\u00a0\u00a0To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?\u00a0 How long have you been working towards financial independence and where are you today?\u00a0<\/strong><\/div>\n<\/div>\n
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After adjusting some numbers, we\u2019ve landed on a rough FI number of $1.8 million. This would allow us to live on $70,000\/year.<\/div>\n
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Currently our net worth sits at $360k ($820k in assets and $460k in liabilities if you include our home).<\/div>\n
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My salary is somewhat variable. I have a base salary of $75k and have made bonuses ranging from $60k-100k per year. My highest earning year so far I made $182k total, which was in 2019. I work anywhere from 30-40 hours a week.<\/div>\n
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My husband works in a specialized area of pharmacy known as Managed Care. He has had gradual salary increases over the past 6 years and has a current salary of $145,000. He typically works 40-50 hours a week, and telecommutes from home.<\/div>\n<\/div>\n
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We have a graduated plan to increase our savings rate as we pay down debt. In 2018 we had a savings rate of approximately 20%. In 2019 that increased to 25%. With my student loans finally paid off, I\u2019m anticipating a savings rate of 35% for 2020. Once my husband\u2019s student loans are paid off (hopefully by 2021) we can increase our savings rate upwards of 40%. We really like the idea of not having a mortgage, so we will likely aggressively pay that down by 2027.<\/div>\n
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That\u2019s our full FI\/RE plan, but we\u2019ve also worked out other scenarios where my husband could leave his job much earlier and I could continue to work a bit longer.<\/div>\n
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We have been actively pursuing FI\/RE for about a year and a half now. The biggest thing that has helped propel our net worth has been contributing to our 401ks enough to get our company match. 2019 was the\u00a0first year I have been able to max my 401k\u00a0contributions (and before finding the FI community, I\u00a0wouldn\u2019t have even known that it was a thing that people do).<\/div>\n
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4.\u00a0 Do you feel deprived?\u00a0 Do you feel like you are sacrificing and missing out on life?\u00a0 How would you say your mindset has shifted throughout your FI journey?<\/strong><\/div>\n<\/div>\n
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We\u00a0don\u2019t feel deprived, we feel more intentional and focused. \u00a0We recently went on a 10 day Hawaii trip that we travel hacked! We have tweaked a few major things to allow us to save and invest more aggressively. Cooking at home saves money and allows us to eat healthier (and going out to eat\u00a0with three small kids is no picnic, so all the more motivation to eat at home!) \u00a0We have cut back on almost all of our\u00a0discretionary\u00a0spending on clothes and\u00a0\u201cstuff\u201d, which we\u00a0haven\u2019t missed at all. We have financed\u00a0vehicles in the past, but\u00a0continue to drive them now that they are paid off. We have large, comfortable house and a cleaning lady. We live richly\u00a0without spending every dime we make.<\/div>\n
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5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?<\/strong><\/div>\n<\/div>\n
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In a nutshell:<\/div>\n
We DO spend on\u2014food, travel,\u00a0family, activities, giving<\/div>\n
We DONT spend on\u00a0\u2014 new cars, clothes, tech\/gadgets, memberships\/subscriptions, luxury items<\/div>\n
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We have no qualms about spending money on dinners out with friends, and when we do go out, we\u2019ve never been the people to look at the prices on the menu. We used to go out 7-8 times a month, but have scaled back to 2-3 times a month. We also have a hefty vacation fund that we take advantage of a few times a year. Being able to visit family and friends out of state is important to us. We will sometimes spend up to $8,000\/year on travel – though after being introduced to travel hacking I\u2019m trying to get that number down! We love being able to give monetary gifts to friends and family for big occasions, and enjoy being generous tippers.<\/div>\n
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6. Do you use a budget?\u00a0 Do you track your expenses? Do you track your net worth? If so, how often do you update these?<\/strong><\/div>\n<\/div>\n
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We do NOT have a budget, but I do track expenses to some extent. I have a list of recurring expenses, and we have\u00a0separate\u00a0accounts set aside for house expenses or emergencies. Sticking to a strict budget would\u00a0definitely contribute to a feeling of deprivation or missing out, so we\u2019ve never used one. Our spending is mostly done with credit cards,\u00a0which makes it easy to track.<\/div>\n
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I do track our accounts monthly (401ks, HSAs, savings, investments)\u00a0and keep a monthly log of our net worth (I track it both with and without the value of our house, as this would not play into our FI\u00a0number)<\/div>\n
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7. As a FIRE member living in the US, are there any pros to living in America specifically that have helped you along your journey?\u00a0 Conversely, any cons?\u00a0\u00a0<\/strong><\/div>\n<\/div>\n
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There are only a few countries in the world where we would be able to use our medical degrees, so living in the US is necessary for our careers.\u00a0Thankfully we live in a low cost of living area and in a country with a relatively low tax burden.\u00a0US healthcare costs will surely be a barrier in the future, and may result in me being employed (at least part time) longer than anticipated.<\/div>\n<\/div>\n
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8. What is your investment strategy?\u00a0 Do you invest in mutual funds, index funds, dividend growth stocks, real estate, other business, etc.?\u00a0 Has your investment strategy changed over the years?<\/strong><\/div>\n
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We currently are invested in index funds, individual stocks (including dividend growth stocks), REITs, and a small percentage of bonds. Our current investment strategy does not include real estate. I have moved most of my holdings to index funds, but my husband still prefers to have primarily individual stocks in his portfolio. Our strategy is buy and hold\u2014no day trading here! We have both tax advantaged accounts and personal investment accounts.<\/div>\n
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9. As a parent to 3 kiddos, what have been some of the most expensive child related expenses from your end?\u00a0 What are some of the best items or experiences you’ve spent on your children to date? What were some baby\/child items that you thought you needed by didn’t really need?\u00a0\u00a0<\/strong><\/div>\n<\/div>\n
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We have been blessed with lots of free childcare from our parents. We\u2019ve estimated that\u00a0they\u2019ve saved us over $45k in childcare expenses over the past 4 years (our\u00a0kids are currently 4 1\/2, 2, and 4 months). We recently got an Au Pair to\u00a0help with childcare.\u00a0The program will cost roughly $19k for the year. Financially, it makes mores sense for us to pay for childcare than for one of us to stay home — My husband and I both value our\u00a0careers and enjoy working full time right now. Not to\u00a0mention we can use my husband\u2019s Dependent FSA to defer some of our tax burden.<\/div>\n
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Other than\u00a0childcare and birth expenses, our kids\u00a0haven\u2019t been that expensive! We get a ton of hand-me-down clothes from family, and have re-used car seats\/cribs\/baby gear. Formula can\u00a0definitely be expensive, but I\u2019ve found ways to get it at a deep discount at our local grocery store. We keep a lot of\u00a0extracurricular activities to a minimum, but have an annual zoo\/museum pass.<\/div>\n
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We splurged on a fantastic carseat\/stroller combo called a Doona<\/a>\u00a0\u2014it’s been worth every penny and saved my back.<\/div>\n
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10.\u00a0 As an American pursuing FIRE, what are your post-FIRE thoughts\/plans regarding health coverage?\u00a0 As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?<\/strong><\/div>\n<\/div>\n
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Currently my\u00a0employer subsidizes most of my healthcare\u2014I pay $100\/mo. My husband and kids are on his employer’s high deductible health plan with a HSA\u00a0with a\u00a0premium of about $130\/mo. He maxes out the Family HSA contributions every year.<\/div>\n
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We\u2019re honestly not too sure what our plan is for healthcare once we hit FI\/RE. Its hard to estimate where costs\u00a0will be in 8-10 years. We will keep re-evaluating as we go.<\/div>\n
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11. If you could go back in time and change things, what would you have done differently?<\/strong><\/div>\n<\/div>\n
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We might have reeled in our spending sooner. I could have taken out slightly less in student loans and more aggressively paid them off. I wish\u00a0I had done more self education on personal finance early on!<\/div>\n
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12. Has discovering financial independence changed how you view your job and life overall?\u00a0<\/strong><\/div>\n<\/div>\n
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I love my job and my goal for financial independence is not to be able to leave my job entirely, but to rely less on my earned paycheck. Right now I worry about missed days as missed income. I\u2019m looking forward to more flexibility. My husband, on the other hand, has a much more\u00a0stressful job and would love to be able to forego work entirely at some point.\u00a0The idea of financial security without having to go to work is very appealing. It\u2019s really cool to have such a specific goal that we can work towards\u2014that has been really motivating for us.<\/div>\n
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13. Do you take advantage of tax advantaged accounts offered to you?\u00a0 If so, which ones and how so?\u00a0 Do you have a game plan to be able to withdraw from these funds without getting hit with a penalty?<\/strong><\/div>\n<\/div>\n
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My husband and I have both been good about\u00a0contributing to our\u00a0employer sponsored 401k plans. Our income precludes us from being\u00a0able to\u00a0contribute to an individual Roth IRA, so we may look into backdoor contributions or a Roth conversion ladder in the future. We maximize our HSA contributions because we are unsure what our healthcare coverage will be like in the future.<\/div>\n
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My Father In Law recently retired, and he says that he regrets not having more money outside of his IRA\u2014he feels frustrated not being able to access a big portion of his money. We are taking this point of view into consideration when looking at balancing our taxable and tax-advantaged accounts.<\/div>\n
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14. Where do you see yourself in the next year, 5 years, 10 years?<\/strong><\/div>\n<\/div>\n
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Over the next few years, we will\u00a0just be chugging along, slowly investing and paying down debt.<\/div>\n
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Within 5 years, we should have a net worth over $1 million with our only debt being\u00a0our mortgage. Our kids will all be in school at that point, so our childcare expenses will taper off.<\/div>\n
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In 10 years, at the ages of 42 and 44, my husband and I will be\u00a0financially\u00a0independent\u00a0with no mortgage and a net worth of around $2.2 million. We may or may not have retired at that point!<\/div>\n
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15. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?\u00a0 If so, how did you bring it up and what were their reactions?\u00a0 If not, why not?\u00a0 Why do you struggle with this conversation and why do you feel that money such a taboo topic?\u00a0\u00a0<\/strong><\/div>\n<\/div>\n
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Our parents know that we are working towards early retirement, but I\u2019m sure\u00a0don\u2019t\u00a0believe that we will be able to do it as early as we say we could. People seem to think that you need a lot more money. We have a few close friends that know we are going towards FI\/RE, but some of them\u00a0don\u2019t believe it can be done without eating beans & rice and riding our bikes to work\u2014ha! I joke with my coworkers that I\u2019ll retire before my supervising doc, who is 14 years older. A few of our friends are interested in Real Estate investing as supplemental income, but\u00a0haven\u2019t been actively\u00a0pursuing FI\/RE. I just want all my friends to be\u00a0financially independent so we can all hang out during our early retirement!! I love that\u00a0I have an online community of people to talk money with!\u00a0The money taboo is real\u00a0\u2014I\u00a0don\u2019t want to be perceived as bragging about our wealth.<\/div>\n
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16.\u00a0 What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?\u00a0<\/strong><\/div>\n
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Don’t beat yourself up about what you COULD HAVE DONE. Just start making small changes NOW. You don\u2019t have to live like anyone else to make Financial Independence a reality\u2014but you do have to spend some time reflecting on what is important to you.<\/div>\n
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17. What has been your greatest accomplishment to date?<\/strong><\/div>\n
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Graduating with my medical degree and becoming a skilled medical provider.<\/div>\n
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18. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?<\/strong><\/div>\n<\/div>\n
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Playing with FIRE<\/a> and Work Optional<\/a> are two of my\u00a0favorites to introduce people to the idea of FI\/RE. I wish\u00a0I had read JL Collins\u2019 Simple Path to Wealth<\/a> 10 years ago!\u00a0And I love The Latte Factor<\/a> as a gift idea for younger adults.<\/div>\n
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I\u2019m not much for blogs but I\u2019m loving Broke Millennial Blog and, of course, Modern FImily.<\/div>\n
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I\u2019ve binge-listened to almost every\u00a0episode of the ChooseFI podcast!\u00a0While I\u2019m\u00a0waiting on new episodes, I am getting into Paula Pant\u2019s Afford Anything and Bigger\u00a0Pockets Money.<\/div>\n
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19. How can people get in contact with you?<\/strong><\/div>\n<\/div>\n

I have a personal finance Instagram account: @prescriptions_and_paychecks. I\u2019d love to connect with more people in the FI\/RE community!<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Pretty great stuff, eh?! If you enjoy personal finance, like seeing funny memes, want to learn more about her “BroPair”, and want some yummy food recipes, give Steph a follow on Instagram!\u00a0 Here are some of our key takeaways from this interview:<\/p>\n