By the time I finish my summer vacation, it will have been exactly 20 years since I graduated from residency and started my first job as an attending. Twenty years. I thought I would work for two years, pay off some debt, then move. Well, things didn’t quite work out as I’d planned.
Two decades later, I’m still sitting at the same desk in the same ER, in the same hospital, in the same city. I stayed because I got the opportunity to be a founding partner of a new ER group. I am now financially independent, am a partner in several businesses, own eight figures of rental real estate, and have a diversified equities portfolio (you can see my latest asset allocation here).
But I can’t help wondering what would have happened if I had moved after two years? How would my financial life be different? Would I still be financially independent?
20 Years of Learning: Wins & Losses
It took me most of the last 20 years to figure out personal finance and investing, including many years spent studying informally and 2 years earning my MBA. I’m still learning every day. I did a lot of things right, including The (Inadvertent) Good Decisions I Made to Start My Medical Career. I also did a lot of things wrong, including 15 Money Mistakes That Have Cost Me Millions.
For several years at the beginning of my career, I “invested” in real estate, by which I mean I had a second job remodeling houses when I wasn’t working in the ER, which I then rented out. I previously wrote about My First Real Estate Transaction and about Our Vacation Home. I have also used leverage, borrowing millions of dollars to finance these rentals.
I have started several businesses, some of which were wildly successful, others not so much. I have bought and sold businesses and even made a million dollars from a drive-through COVID testing station.
Through ups and downs, wins and losses, good decisions and blind luck, I circuitously made my way to financial independence and a higher net worth than I ever thought possible.
But is this what you should do? Should you attempt to replicate my path? While I believe that every medical professional can start a successful business, not everyone is interested. What if you just want to work a job, be the best doctor you can, and then go home to your family?
I thought it would be fun to explore an alternative reality to my last 20 years using a realistic set of counterfactuals. What would my financial life look like if I had taken an easier path and just followed the advice I give here on this site to those who aren’t interested in business and real estate, but who still want financial independence? Let’s find out.
Rules of the Game
What would my net worth be if I “just” worked as an ER doctor for the last 20 years and invested in index funds? That is the question I am trying to answer, and to ensure that I’m eating my own cooking, I will follow the advice I outlined in Personal Finance Basics for Medical Professionals Part I by doing the following:
- I will invest at least 25% of the gross income I earn as an attending physician, with the exact percentage based on the income table that follows.
- The order of operations for all money saved/invested is taken from The Financial Vitals Checklist.
- All investments in every account are 80% VTSAX (Vanguard Total Stock Market Index) and 20% VBTLX (Vanguard Total Bond Market Index). For simplicity, there is no rebalancing.
- All returns are market returns, and all investments are presumed to be made at the end of the calendar year (except for 2026, which is YTD).
Results
The table below shows my annual income, the percentage I saved/invested, and where those investment dollars went. I started as an attending in August of 2006. The results for 2005 – 2008 are my actual income taken from my tax returns from working in the ER during that period.
Starting in 2009, the income number is an estimate of what I earned from working clinical shifts. The numbers from my tax returns include business and rental real estate income, so it was easier to estimate an income based on the number of shifts I was working at the time.
I took these numbers and invested them using the actual returns of VTSAX and VBTLX in an 80/20 mix through the middle of 2026. The results, shown below, would my net worth and asset location in this alternate reality.
Based on this counterfactual, I would have a net worth of nearly $12 million, not including a primary residence. While this is less than my actual net worth, it is clearly enough to be considered Fat FIRE, and demonstrates that you don’t have to invest in real estate or start a business to become wealthy.
How Realistic is This Counterfactual?
It’s fun to run projections like this, but how realistic is it? Could this really have been my life over the past 20 years, and could anyone have replicated these numbers? And, more importantly, could a new graduate do the same over the next 20 years?
Income: If anything, the income level presented is low. I deliberately chose to live in a place that pays well and has no state income tax. There is an ER very close to where I work offering $400 per hour right now. While this level of desperation comes and goes, the pay in this area of the country has always been above average. My highest earning years in this experiment were 2007-2008, and those are my real numbers. My guess is that I would have worked more shifts over the years than I did if the ER were my only source of income. So, the income is realistic.
Asset Allocation: The asset allocation I used is simple and realistic. If anything, I owned more bonds than I should have for the first several years, which lowered my returns. An 80/20 mix for a 50-year-old may be a bit aggressive, but this is more bonds than I own in my real-life portfolio. So yes, it is realistic.
Investment Returns: These are the actual market returns for these highly diversified index funds, making them 100% realistic.
However, the average return of VTSAX from 2016-2026 YTD was 12.4%, handily beating the S&P 500’s average return of 9.8% since 1928. This is partially offset by a lower bond return during the past 20 years (3.2%) than the average since 1928 (6.5% for corporate bonds).
The blended average of an 80/20 portfolio during the last 20 years is 10.5% vs 9.1% since 1928. I recalculated my alternative net worth using 9.1% annual returns and ended up with a balance of $8,952,953. While not as good, I’ll still take it.
My only other note is that I did not rebalance the portfolio for this counterfactual. While rebalancing usually adds to investment returns over time, it probably would have hurt during this two-decade run of soaring equities. So, the returns presented might be slightly higher than in a situation where I rebalanced yearly.
Savings Rate/Budget: This one is a little harder to answer. In the alternative-reality example, my maximum savings rate in any year was 40%. Would it have been realistic to live on what was left?
As a married man taking the standard deduction with a $500,000 salary and a 40% savings rate in 2012, I would have invested $200,000, paid $122,790 in taxes, and spent $177,210. Could my wife and I have lived off 15k per month in 2012 when we didn’t have kids? Without a doubt.
The better question is, could I have saved 35% of my $330,000 salary in 2022 with three kids? I would have invested a total of $115,500, paid $34,265 in taxes, and spent $180,235. With a lower savings rate and a lower federal tax rate than in 2012, we would still have had about $15,000 to spend each month.
The savings rates demonstrated are realistic, but they would require some modifications to my family’s current lifestyle. First, we certainly couldn’t have my kids in the same private school. We also wouldn’t have a vacation home in Hawaii. I doubt we’d live in the same house we do now in Austin. Otherwise, I don’t think much else would be different.
Yet even if I modified this alternate reality to invest only 25% of my gross income each year, my net worth would still be a very respectable $7,779,025. I would still consider myself financially independent and could retire if I chose. My family would have had more money to spend each year, but not enough to make any dramatic changes.
Conclusion
Based on the results, the answer is a resounding yes. I would still have been financially independent had I never started a business or invested in real estate . . . as long as I had followed the sound advice offered on this site. The 20 years of better-than-average market returns helped, but as I demonstrated earlier, not that much.
This experiment makes me wonder what the results would have been if I had just started the ER group in 2009 and stuck with only securities instead of starting other businesses and buying real estate. I have a partner who did exactly that, and to be honest, I’m a little scared to find out. As I tell residents in the ER who want to order unnecessary tests, “don’t ask questions you don’t want to know the answer to.”
I sometimes worry that I come across as unrelatable on this blog because of my business income and real estate investments. I hope this counterfactual presentation of my life has demonstrated that any medical professional can achieve financial independence. You don’t have to start a business. You don’t have to invest in real estate. You do have to spend less than you earn and invest the difference. You do have to be consistent.
By following the advice on this site, specifically Personal Finance Basics for Medical Professionals Part I, you too can achieve financial independence.
Thanks for reading. I hope you enjoyed looking at the financial life of Bizzaro Neill. Leave any questions or comments below and consider subscribing to the blog.