[Editor's Note: The primary mission of The White Coat Investor since we started in 2011 has been to provide financial literacy for docs, dentists, their trainees, and their students. But we know we’re not alone in teaching others about money and how to make it work for you. That’s why, every year, we honor the Financial Educator of the Year and give them the recognition they deserve (and $1,000). Nominations for 2022 are now open, so if you know somebody who’s impacted your financial life and the lives of others, complete this form by May 2 and let us recognize those who are making your financial world a better place!]

By Dr. Disha Spath, WCI Ambassador

Doctors—and other people who are used to making a lot of money—often focus on increasing income in order to build wealth. And who can blame us? When it is so easy to trade our time and skills for big bucks, you can get caught up running on the hedonic treadmill of income production. Oftentimes, our spending and expectations grow alongside the increasing income, as well. But, there are certain times in life when we are reminded that the income we made so easily may not always be depended upon to support our families. The sudden drop in medical visits during the beginning of the COVID pandemic was one example of such a time for many physicians.

My revelation of this truth occurred a few years before that with an unpaid maternity leave.

Just five years ago, my life was a lot different. I had just graduated from residency, and my husband, an Army captain, had recently gotten out of the service due to medical issues. He enrolled in a master's program, and I went to work as a full-time hospitalist. He planned to stay at home with our son and to do his studies remotely.

“Sure, I’ve got this,” I thought. “Many families have lived on one doctor’s income. We can do this, too.”

So we bought the doctor house in Georgia for $350,000 and some reasonable cars (two Hondas) and achieved the American dream (?)—mortgage debt ($335,000 + $130,000 for a rental property we already owned), car debt ($40,000), and student loans debt ($237,000). All of that amounted to three-quarters of a million dollars in debt! After accounting for equity, we had a net worth of . . . wait for it . . . negative-$250,000.

Of course, each of the above-mentioned debts produced a fixed cost every month that needed to be paid along with our living expenses. It was fine; we could afford to make the payments—as long as I was earning income. We were even maxing out our 401(k)s, paying a little extra to student loans every month, and building our emergency fund.

But, as soon as the income stopped on maternity leave, I was reminded of the cost of carrying a lot of fixed expenses and liabilities. We had very little breathing room. Sure, we had saved a nest egg in preparation for the maternity leave. But the payment pause on my student loans that I had expected during maternity leave didn’t get approved for some unknown bureaucratic reason and that put an unexpected strain on my family’s finances.

In this space of very little breathing room, scarcity, and fear, I spent my maternity leave trying to sew a couch cover while listening to The White Coat Investor book. As I listened, I realized the reason that I felt poor even though everyone else thought I was rich. You see, I had bigger plans. I dreamed of being free from living paycheck to paycheck.

I had also previously read Rich Dad, Poor Dad and had the framework in mind for making that happen. I dared to try to own my own time, to stop trading time for money, to work as little or as much as I wanted. Everyone else seemed to think a doctor’s income would be enough to have plenty of money on the side to invest. But the reality is that living the upper-middle-class doctor lifestyle on one internal medicine income often leaves very little extra money at the end of the month, especially when there is student loan debt in the picture.

We often end up shackled to our jobs and paycheck to make ends meet at the end of the month.

I realized that to achieve my dreams of early financial freedom, we would need to make more room between our income and our expenses. Being a new mom, I wasn’t willing to work more. I dreamed of more cuddle time with my baby. But I could certainly get better control of our expenses.

So, my husband, Josh, and I made a plan to turn things around quickly, before our kids were too cool to want to hang out with us. And turn things around we did.

We went from worse than broke to the double comma club in just five years. I now work only as much as I want to and have plenty of time to hang out with my babies. Here is the short version of how we did it:

In this way, we have decreased our expenses and liabilities and increased our income and investments over the last five years. I have steadily been increasing my income diversity, as well, by working as a primary care physician, a hospitalist, a freelance writer, a podcaster, a speaker, and now as your WCI Ambassador.

I just love that there are so many ways out there to build our financial freedom and that there are so many of you here excited about learning it and teaching it to others. I hope my story will help the WCI community, and I look forward to sharing the rest of our journey and to growing with you.

It’s totally possible for lower-income docs and other younger moms like me to create a financially stable future for our families. If we make a few right moves, we can make rapid progress. We just need to be a little bit more cognizant of the expense side of the equation and a little more creative.

For me, the goal of achieving rapid financial independence has taken a back seat to prioritizing financial flexibility. Some call this approach SlowFI. Recently my boys have been telling me that I am working too much and they would like to see me more. Thanks to a comfortable magic delta, I can cut back my clinical work hours without sacrificing our financial stability.

In fact, I have found that every time I've cut back clinical hours, I am usually able to make up the income lost in a smarter way that makes better use of my time and efforts. That’s the beauty of living below our means—it gives us the financial flexibility to prioritize exactly those things that are most important to us, so we can design a life that we are truly thrilled to live.

How long did it take you to get back to broke after training? What steps did you take? Have you found other ways to increase your income in a more time-efficient manner? Comment below!

Disha, You are inspiring! I know a lot of doctors who have the “X factor.” From day one they seem to save, invest, and grow wealth. Others overspend and make money mistakes for decades. Those who made bad financial choices for many years often feel trapped. I see the fear and desperation in their eyes when they ask me for advice after one of my talks. The questions come in the format of “Is it too late for me?” I will direct those folks to this and other posts you wrote. No, it isn’t too late. You demonstrated that it is possible and desirable to turn your financial ship around. Thank you for your courage and vulnerability in putting your story out there. I have no doubt you will continue to uplift your colleagues.

dominating story Disha! I love your underlying hardcoreness to finance and the attainment of more time with baby and hubby despite a very sweet and unassuming personality when you speak or are hosting the WCI podcast. I think many docs believe they can’t go HAM on finances as they don’t fit a certain personality stereotype. My own wife for example keeps saying she’s not good with money and can’t be frugal because she’s a woman, despite being a full time anesthesiologist and a mom! You are a great role model for many docs like her who think the same focus, energy and dedication that made you into a doctor is somehow diametrically opposed to being good with finances! Now if only I can get my wife to read this blog post of yours . . .

Great article and hits close to home as an early career physician starting a family. I’d love to see more articles about how you’ve chosen how to balance finances, family, and career as well as any “mom hacks” to maximize your time as a physician mom.

I love the concept of the magic delta! Out of the two options I sometimes feel reducing expenses isn’t considered enough. You can of course pursue earning more but just being more conscious of your spending is an instant actionable step towards saving more money.

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Instead of wondering when your next vacation is, maybe you should set up a life you don't need to escape from.