A number of weeks ago, I had the pleasure of chatting with Dr. Taylor Brana on his podcast, The Happy Doc podcast.
It was so enjoyable especially because his message and the reason he started the podcast is so amazing and spot on: His goal is to highlight happy and fulfilled doctors.
Unfortunately, as we all know, happy docs are on the decline. But thankfully, there are many out there, like Taylor, working to improve all doctors well-being!
I spent my time on the podcast discussing my journey with burnout and how I discovered that financial well-being was a really important but neglected component of my overall well-being!
We also hit on topics like:
- Facing my mistakes to begin my path to financial well being
- Coming up with a plan for financial success
- Real estate investing for physicians
- And a ton more!
I hope you enjoy our conversation as much as I did and don’t forget to check out more amazing content from Taylor!
Check out the video of our discussion!
Let me and Taylor know what you think of our chat! Are you a Happy Doc? Tell us why and how in the comments below!
And as always, please sign up for our mailing list below (under the comments) to receive our weekly newsletter.
Also, join The Prudent Plastic Surgeon Facebook community to gain exclusive content and join in on our Real Estate Happy Hours!
Btw, I’ve also included a full transcript below courtesy of The Happy Doc:
Hello guys, before we get into the episode, I do want to give a disclaimer. Dr. Frey and I discuss finances, but I want to say that this does not constitute accounting, legal, tax or professional advice. These are our opinions. These are the models that we use for our finances. So please don’t take this as exact professional advice that you need to use for your life when it comes to money. And when it comes to business and finance, these are your decisions, and it’s very important to seek out professional help, if that is the route you’d like to take.
Welcome to The Happy Doc, the voice of fulfilled physicians. Sharing life stories from physicians, health professionals and entrepreneurs, so that you can live your happy life.
[00:00:49] Dr. Taylor Brana: Hello Jordan, how are you doing?
[00:00:51] Dr. Jordan Frey: Good. Good. How are you, Taylor?
[00:00:53] Dr. Taylor Brana: I’m doing amazing. So this is another episode of The Happy Doc Podcast. And today I have Jordan Fry, the Prudent Plastic Surgeon. and I love the name. So before we get to anything, how did you get that name?
[00:01:07] Dr. Jordan Frey: I was just trying to think of something alliterative or something kind of catchy.
[00:01:11] So I had gone, I had gone through a few different ones initially, I thought, because my whole thing is Harding and I’ve made a bunch of mistakes and I’m trying to get better and, and sort of write my financial ship. I thought of the poor plastic surgeon, cause you don’t usually think of a poor plastic surgeon, but then I was like, who’s going to want to read from someone who’s admitting that they’re poor.
[00:01:31] So I thought prudent was like a good, a good alliterative version of that.
[00:01:36] Dr. Taylor Brana: Awesome. Awesome. So, Jordan, what got you started into medicine or what got your head thinking to go down this road?
[00:01:43] Dr. Jordan Frey: Yeah, it was all through my life. I loved science, but I ended up going to college and playing a sport, playing baseball.
[00:01:51] And I, I just did business because that was sort of the easiest to fit in the schedule. But like the first business class I took, I really hated it. And so then. You know, I kind of thought, well, what did I like? And you know, high school and stuff. And I was really into chemistry and biology. So I switched my majors.
[00:02:08] I ended up stopping playing baseball, and then I had to make a decision, like, do I want to become a chemist? And then I just didn’t see that as the most exciting thing. And so I thought kind of the, the. I don’t know, fun. It seemed fun to me, the fun kind of practical application of science and medicine. And so I got interested in it and just never looked back.
[00:02:28] I have loved it ever since.
[00:02:29] Dr. Taylor Brana: Absolutely. Absolutely. And so you decided to go prepared, you took your exams and everything. You took the pre-reqs, you went through the process and then you went to medical school. Did you always know you were going to go into plastics or what kind of happened that sets you over to that path?
[00:02:47] Dr. Jordan Frey: Yeah, no, it was totally unexpected. Before I really learned what plastics is, I kind of had what I think most people think of, which is sort of the aesthetic surgeon, which is obviously one component of what a plastic surgeon is. But I sort of was like picturing that Beverly Hills plastic surgeon.
[00:03:06] And I told my family, I was like, You know, that’s one thing I’m not going to do. I’m not going to do plastic surgery. And of course, that just drew to me into doing that. But, so I was a third year and I was kind of like where you had to choose. And I kind of thing. I was just going to do general surgery and.
[00:03:23] I had an elective. And for some reason earlier in the year, I had selected to do like neonatology and then like a week before I was kind of like that just doesn’t seem as interesting to me as, I guess I thought it was then. And the only other elective open was pediatric plastic surgery. So I thought, well, it’s surgery, I’ll go and see.
[00:03:42] And so I ended up doing that for two weeks and I was just blown away by what plastic surgeons actually do. And I was seeing them do. Complex craniofacial surgery and cleft lip and palate. And then, then I was seeing the reconstructive stuff kind of more, what I do now, which is microsurgery and doing free flaps for trauma or had a neck cancer or breast cancer.
[00:04:03] And I just was totally Taken and I decided I was going to do it and I applied and got in and I’ve just been loving it.
[00:04:12] Dr. Taylor Brana: That’s amazing. Now it’s, it’s a long path, right? So to specialize in plastics, how, how many years is it? Post medical school? How much, how much training and residency.
[00:04:23] Dr. Jordan Frey: Yeah, it depends.
[00:04:24] It’s a lot. So there’s a few different ways. There’s an integrated pathway, which is what I ended up doing, which is six years. And then I did a year long microsurgery fellowship. So seven years of training, then another path is you can do a full five years of general surgery, and then you do three years of plastics.
[00:04:40] And then if you do a fellowship on top of that, that could be nine years. so it’s definitely a long road.
[00:04:47] Dr. Taylor Brana: Wow. That is you know, a lot of ears and yeah, I know. We’re, we’re going to be definitely heading into this conversation. One of the things we’re going to talk about, of course that we discussed a little bit earlier is financial wellbeing and how that’s really important for physicians.
[00:05:04] Right. I can imagine, as you’re saying that six, seven, eight, nine years of training and residency, you are extremely. Delaying the process of getting your finance finances in order, and obviously getting that attending level salary. can you talk, can you start to paint the picture of what your process was in your early beginnings and finances and how that developed?
[00:05:28] Dr. Jordan Frey: Yeah. Yeah. It wasn’t all that long ago. It’s we’re recording this, I guess September 17th. So it was probably April or may. I can’t remember exactly, but just like. Five months or so ago that was all right. Really started. And the reason was because I was getting to the end of my training, the end of my fellowship.
[00:05:51] And I always sort of had this notion or everyone kind of says like Oh, you’re going to be coming, attending. Like, everything’s going to be fine. It’ll all work itself out. And that’s, that’s usually just people who are not really There were a lot of people that weren’t in the field of medicine who were telling me that like my family, just because that’s what they assumed that all doctors are just going to end up being financially.
[00:06:14] Okay. Then it was also a lot of attendings and, and people who kind of were, were. Pass the stage or whatever their circumstances may have been different. And I realized that just wasn’t gonna happen for me. You know, I was getting towards the end, even though I was going to get a huge salary jump, I still had a huge amount of loans, like over $400,000 of loans, I had credit card debt and I didn’t really have a plan of attacking that.
[00:06:39] And so my wife and I sat and we just said, okay, we have to kind of face this head on. And we had both sort of shied away from. Thinking about that. And I really kind of buried our heads in the sand. I mean, not, I’m not proud to admit that, but that was our strategy for six, seven years. And we said, we need to, we need to really look our mistakes in the face.
[00:07:01] And we were scared to do that. But once we did it, we sort of felt empowered because we were like, Okay. Now we know how bad it is and we can actually take steps to fix it and to get on the right track. And that’s what we’ve done. And that’s what I call financial wellbeing, even though I still am $400,000 in debt and I still have credit card debt that we’re paying off aggressively.
[00:07:23] But we have a plan. Because we have that plan, I feel like our financial wellbeing just went way, way higher. And I found like I, yeah, I just became a better surgeon, a better doctor because of that. And my overall well being improved because I had that aspect sort of more in control.
[00:07:42] Dr. Taylor Brana: Yeah. That’s I mean, that’s great.
[00:07:44] And you know, obviously I understand that a lot of people, like you said, barrier heads into the sand and you don’t think about it. You don’t, you, you expect if at some point you’re gonna receive that bundle of money, so to speak every couple of weeks or every month, and it’s gonna work itself out.
[00:08:01] and in your story, like you said, that’s not the case. Like you have to. Start to think about what’s coming in, what’s coming out you have to have a plan in mind and all of those things. So I think this will be a great segue into, we wanted to talk about which is financial wellbeing. So obviously it’s not just for physicians, it’s for professionals, for it’s, for anyone who’s working really, it’s really important to understand what it takes to be financially.
[00:08:30] Well, and to, like you said, you don’t necessarily have to. have all your ducks in a row, but you certainly want to be able to know what the heck you’re doing and how to have the plan in place, so you know how to attack. So can we talk about what, what it really means to start to tease this out and become financially well?
[00:08:49] Dr. Jordan Frey: Yeah. Yeah, absolutely. I think like the first step, the first step for us obviously was looking at our situation as a whole, which meant like, Looking at our mistakes. And that was even things as simple as really determining how much debt we are truly in, in terms of our student loans and things that can be uncomfortable.
[00:09:13] I know I did. And I know a lot of people have shared with me that they do the same thing. You know, during residency, I just did deferral or forbearance every year on my loans. And so once a year, I just sort of like would close my eyes and fill out the forms and like, try to pretend like those massive numbers weren’t looking back at me.
[00:09:32] So I think just looking at what your situation actually has, it gives you a ton of power. Cause then the first step is if you’re digging a hole is to stop digging and then you can start climbing out. You can’t just say Oh, I want ’em. I want my, my net worth to be I just want my net worth to be zero again you can’t, you gotta crawl before you walk before you run kind of thing.
[00:09:56] and so I think doing that and then like, just, just getting educated. Yeah. Just reading some books and I thought like the idea of managing your own finances was. Impossible something that like you needed a formal education to do that only these sort of like professional advisors could do.
[00:10:16] And that’s just not the case just from. You know, now I’ve read a ton of books, but after we chose three books, my wife and I read at the same time. So she would read one, I would read another and we would switch and then we would talk about them. And just from that, we started managing her own finances, just cause we learned about how to invest and how to save and you know, really just kind of how to manage your money and your life.
[00:10:40] Dr. Taylor Brana: And that’s a really great point that you make there. So you obviously wanted to. You know, not just bury your head into the sand anymore. You wanted to take a look at the reality of your situation. Like you said, your number before it was like hundred thousand or whatever it was, it’s a scary number. Right.
And especially on a resident salary. So I don’t think a lot of people realize that residents somewhere between like 40 to maybe 60 at the top, when you’re trying to, when you’re training for a longer year, Longer time and that’s not including the taxes and that’s after already deferring a lot of time.
[00:11:16] So you mentioned some books and really learned the basics. What resources did you use?
[00:11:23] Dr. Jordan Frey: Yeah, the first one I did was the white coat investor. His first book, I forget the exact subtitle, but that’s like a fantastic one. And it’s short. It took us like a few days to read and it kind of just hits at the major points, especially for positions.
[00:11:40] Cause it goes over like getting life insurance, disability, insurance, and then kind of budgeting and then the basics of investing and it really kind of hits every point. The next one we read was the millionaire next door, which is like a classic one. And that’s the Waco investor was a little more action oriented.
[00:11:59] Whereas the millionaire next door was sort of more philosophical. But that one completely flipped our sort of conceptions had to, because you know, the basis of that book is that the millionaires in America, they’re not people driving around in you know, Mercedes right now Tesla’s or whatever.
[00:12:18] And they’re not the people necessarily living in yeah. In these huge mansions and things, they tend to be people like the most common car. I was like a Ford Explorer. And they tend to be small business owners and they’re, they’re living, they’re living below them. It means, and they’re saving and they’re investing and that’s how you build wealth.
[00:12:37] That’s you have how much you make and you have how much you spend in that gap. You invest. And so you can either make more or. Save more. so, that’s really, that’s a really great book. Another one in that vein is rich, rich dad, poor dad, which is like a classic. And we read that it has sort of a real estate tilt to it, but it’s also just sort of about how wealth works and you want to.
[00:13:04] You give us Robert Kiyosaki, the author, but he gave us the super simple definition of life, you can buy things that are assets or things that are liabilities and assets. Very simply are things that put money in your pocket and liabilities. Take things out of your pocket. And we were like, all we had was like, I build these essentially, you know?
[00:13:26] and now we’re, we’re buying assets. Like we just bought our first rental property and you know, it’s, that’s another good philosophical book of just, just kind of how to think about money and well then again, it’s not, it’s not the money and wealth is the end all be all. But of course you want to have a foundation to your life to feel.
[00:13:47] Secure so that you can Be the best version of yourself in every other part of your life, if you’re constantly in debt or if you’re a doctor, that’s trying to see more patients at a, at a frantic rate to try and you know, get more compensation stuff to me that that’s not that’s not being a happy doc that certainly wouldn’t be happy for me.
[00:14:08] And that’s what I want to avoid.
[00:14:11] Dr. Taylor Brana: You know, you get, you get brownie points there for using the yeah, just kidding. no, so I, I think you bring up some great points and obviously having a financial foundation is, is so important. You know, you mentioned these three books, the white coat investor, the millionaire next door.
[00:14:29] rich dad, poor dad. And after reading those books, what were some obvious? And I, and I’m asking this question for a specific reason, because a lot of people aren’t exposing themselves. What are some obvious mistakes that after you’re reading this book, these books, you’re like, Oh, I can fix this. I can fix this.
[00:14:46] Like, what were sort of the mindset shifts or the actions or behaviors that you changed after reading these books?
[00:14:54] Dr. Jordan Frey: Yeah, the most obvious one is like we were spending exactly. To our salary, to our earnings every month. And again, we were, I was a resident fellow. My wife was a PhD student and we had two kids living in New York city.
[00:15:11] So there were a lot of expenses, but we didn’t pay ourselves first, meaning we didn’t set anything aside at first. And we could have even just every month set aside a hundred dollars or something and we would have been just fine but instead we found something else. To spend that a hundred dollars on cause it was just there and we were just sort of intuitively doing that.
[00:15:34] So I think it seems so simple now, but like just paying yourself first and just saving the concept of having a set savings rate. I believe like every doctor should end up retiring very comfortably. All you need to do is save 20%. And invest that in like index funds or bond index funds, stock, index funds, that kind of thing.
[00:16:00] And when you retire, you’ll be fine. But we were, we were saving 0% now we’re saving 41%. and you know, the scary thing is, like I said, we were sort of learning about all this right towards the end of my training when I was about to transition to be an attending. And I, we. We a hundred percent would have.
[00:16:23] If we had not learned this, we, I would have increased my salary whatever. It was like eight times, nine times, whatever. And we would have just spent up to our salary. We would have, because that’s just what we were used to doing. And that’s what it seemed like we were doing. We’d probably be driving super fancy cars and we would, you know, be an even bigger house, which we don’t need.
[00:16:47] And we would still be Just basically living paycheck to paycheck and that’s, that’s a scary thought. And I think there’s a lot of people in that position that just cause them, they aren’t exposed to it. Like I was. and that’s kind of what I’m trying to do and to, to share. Cause it seems so obvious now, but it completely wasn’t just six months ago to me.
[00:17:12] Dr. Taylor Brana: Yeah. I mean, I know this from practice as well, because I was kind of in the same position. I’m very lucky to have been exposed to a lot of this stuff a little bit earlier. you know, as you know, I’m sure like. The habits and the actions and the behaviors and the mindset, all of that stuff plays a role.
[00:17:31] and you should learn it actually like now is the time, like, not necessarily as a medical student, but as a resident, it’s definitely the time. Or as you’re starting to make money, it’s definitely a time to learn the foundation before you make a lot of money because as you know, more money, more problems.
[00:17:46] Exactly. If you don’t know how to manage it. And so I, I understand that like now, because I’ve read enough and you obviously have read enough as well. And I think it’s just, again, like, these are great tips. Like a lot of people, like I remember this one, I was in high school when I got my first major job and I was making like six or 700 bucks a week.
[00:18:07] What did I use it on? I used it all on clothes and food and whatever, and it didn’t it never would, obviously at that age, you don’t think about savings. You don’t think about investments. You don’t think about this stuff, but when you start to have debt or you start to develop your life and you start to move forward and you can make some money, especially actually for doctors, who’ve taken on a ridiculous amount of loan debt.
[00:18:31] If you don’t have the skills, you can just get buried. And so I love the tips that you’re giving you know, pay yourself first, save, save you. You gave a percentage, but save X percent, whatever that’s going to be, that’s going to be comfortable and work for you. 20% was the number you gave. Invest, invest that into stuff.
[00:18:48] And we’ll talk about investments shortly. And, and do not spend at the level of your salary. Those are awesome tips. I think that’s fantastic. So when you say pay yourself first, I just want to go back to that point for a second. What do you do, what do you mean by paying yourself first? Like what does that mean?
[00:19:05] Dr. Jordan Frey: Yeah, to me, it’s like You, you have a set amount of savings that you want, and that money is like gone out of your, your checking account before you even see it. Because the checking account is like a slush fund like it’s, it’s just there and if it’s there, you’ll spend it. So. You know, for me, that means you know what, I forget the exact numbers now, but whatever I contribute to my retirement plans at work, that’s out, obviously before I even get the paycheck, but I have like immediate transfer set up for we have a certain amount of savings we’re putting towards You know, our kids college, their five 29 accounts that gets taken out automatically.
[00:19:48] We have a set amount of money going towards real estate investing. That’s an automatic transfer to a different account right away. So things like that. So the money we’re seeing in our checking account is really the money that we have to spend. And I forgot to mention a huge part of that is what’s getting paid to our credit cards and also to our loan debt is coming out automatically.
[00:20:10] So, that money we’re seeing really is. You know, they’re for, that’s really the money we have to spend, I guess it’s not because sometimes if you say, Oh, I want to, I want to pay $6,000 towards the loan this month, but we’ll just leave it in the checking account. Then you can kind of go like, Oh, well I kinda like this and I’ll just pay a little bit less this month and you can see how that’s a slippery slope.
[00:20:36] So it’s almost just like protecting yourself from yourself. Yeah,
[00:20:41] Dr. Taylor Brana: I really want to actually focus on this because I know, I read I think it was, I will teach you to be rich by Ramit Sethi. I’m sure you’ve heard of him as well. And he really focuses on automatic transfers and payments because unfortunately in some ways humans are really stupid and we will make really dumb mistakes because we all you know, have different desires and things we want to do.
[00:21:07] And usually our spending habits are really influenced by the numbers we’re seeing. Right. What’s what, what what’s in our account. So can we go a little bit deeper? Like, let’s talk about like automatic, like how did automatic transferring and like setting that up. How did that impact, like your, your decision making and all of that?
[00:21:26] Dr. Jordan Frey: Yeah, it definitely did. I can remember even going back to when I was in residency and there would be like certain times where for whatever reason, we had sort of saved better a week or a month before. And I would see like, Oh, our checking account is looking a little bit better and I’ll be like, Oh, we have like some more cushion.
[00:21:42] And that like, without even realizing it, our spending would just increase. You know, like we would, whatever, just even activities, we weren’t doing it on purpose, but just when it, when a decision came up like, Oh, can we do this? Or shouldn’t we just intuitively my brain. I would be more likely to be like, Oh yeah, sure.
[00:22:00] We should do it. and that’s again, because that money was just sitting there. It should have been spent on something else, but You know it wasn’t. And so it really has changed. It’s awesome to see, like we have our account that’s for a new car. Then three years, we want to buy you know, a new car.
[00:22:23] And so we just see with every paycheck that’s just increasing and increasing. Even just over the past few months, since we’ve set that goal it’s at a substantial amount and yeah, it wouldn’t be otherwise. And so that that’s the. Sort of positive feedback that comes with it. And then you realize after really after the first few paychecks and stuff, you’re like, my life hasn’t changed.
[00:22:47] It’s not like I haven’t got any more restrictive or anything in life went on and I was just as comfortable and just as happy because probably that stuff you’re spending it on. You weren’t. Spending intentionally that concept of sort of just spending on the things that will make you happy so it, it really has helped a ton.
[00:23:07] Dr. Taylor Brana: Yeah. I mean, and I think it’s really important again, like you said, like, let’s say your paycheck, let’s just say it’s a thousand bucks, right. It’s very different. If you get the whole sum of a thousand or you set up sub savings accounts or separate savings accounts for specific goals, right.
[00:23:22] So let’s say weddings. Coming up or the new cars coming up, you’re able to shunt the money away before you even consider that you need to use it. I’m curious. Cause not all, not all banks let you do this. Right? Like if you don’t mind, like what, what bank are you using that allows you to create these different accounts?
[00:23:44] Dr. Jordan Frey: Yeah, we have a Chase, which actually it’s nice. Cause they have like an auto save. You know, feature and stuff and you can set up all these things. It was pretty easy. We haven’t, even though we moved to New York city, obviously there was a Chase, like every block, but we moved to Buffalo where there’s actually, there’s no Chase’s, but we still kept that because we just liked that feature.
[00:24:02] Dr. Taylor Brana: I mean, it’s, it’s really powerful, well, I have Ally, which is like on the, on line online as well. And ally, it’s a little bit different. It’s interesting. Basically, it’s like super easy and you can just create multiple savings accounts and then you can just title. You can just title it. So like I have like, yeah, I have like my true savings and then I have my investments investment account, and then I have like little sub savings, like vacation or what have you.
[00:24:28] And so I’m sure it’s very similar to you. You can title it as well.
[00:24:32] Dr. Jordan Frey: Yeah, exactly. Exactly.
[00:24:34] Dr. Taylor Brana: And, and, and the thing is like the conversation we’re having. If we talked about this, like a year ago, maybe I would, I would be completely lost. So
[00:24:44] Dr. Jordan Frey: yeah. Same. Yeah.
[00:24:45] Dr. Taylor Brana: And yeah. And if you don’t know, like, this is why I think it’s really important that we’re, or like teasing out some details here.
[00:24:51] Cause if you don’t know this stuff, you will screw yourself and even know it. And it’s just. It’s so interesting to me. You can take two people with the exact same amount of cash flow and they’ll have tremendously different lives with just tweaks and it’s crazy.
[00:25:09] Dr. Jordan Frey: Yeah, no, absolutely. It is. It’s one of those things that it’s like, once you learn it, it’s kind of like that glass shatters and you’re like, man, how did I ever think any differently?
[00:25:21] But it’s so easy to, and there’s so many people who just starting most cars are the reality is our culture is, is one of consumerism and there’s so many forces out there kind of just promoting them like, like, okay, you make money in order to buy. Stuff and to buy status symbols.
[00:25:40] And we’re all guilty of that. I’m not saying that I’m like above that or something, but, but you have to, once you become aware of that, you sort of are able to say, okay, like, do I really want that? Or do I just feel like. I need that because others seem to want it.
[00:25:56] Dr. Taylor Brana: Yeah. Yeah, absolutely. So, no, I’m, I’m just, I’m glad we’re kind of digging into like some of these details here.
[00:26:02] Let’s say this, right? So our listeners they’re, they’re taking this all in. They’re like, okay, I’m gonna read these books. I’m going to start to develop my savings accounts and search for, you know, develop this plan. Let’s go through like some of the steps. Like obviously there’s like a, a national order of things that you should probably take care of in a specific way.
[00:26:22] So what are sort of, like what and everyone’s a little bit different. Like, I might have an order of operations that a lot of people don’t even have a money system, and I know that I’m sure you do. And I do as well, but like, What is your order of operations when you receive, let’s say 10.
[00:26:40] K what is your order of operations like, how would you start to fill in the different areas of your life? Or like what, what would you do first?
[00:26:49] Dr. Jordan Frey: Yeah, so I have on my blog, I published it like my wife and I wrote out and have a complete financial plan. And the first thing on there is our financial situation.
[00:26:59] Priority list. and so it’s on there and anyone can go see, but like we have number one was uh, pay off debt with greater than a 10% interest. So like that’s really consumer. Credit card debt. And number two was establishing an emergency fund, like three to six months of expenses in the event that something crazy like COVID happens.
[00:27:27] and then, yeah, and then there’s you know, pay off kind of medium interest that is three to 8%. That’s our you know, student debt and stuff, max out my retirement plan to get the match max out my wife’s retirement plan to get her match, then, then it’s invest in real estate for us. and then kind of going down the rung there, there’s more and more like contributing to college funds you know, taxable investing and or I guess Roth backdoors before that, then taxable investing and then paying off a really low interest rate debt, like less than 3%.
[00:28:11] Dr. Taylor Brana: Yeah. So let’s, let’s talk about that. Cause you know, I, I have a different order of operations, but I also like, again, I think it’s also dependent on like your, your goals and what you’re trying to achieve
[00:28:22] Dr. Jordan Frey: and like how
[00:28:22] Dr. Taylor Brana: it ups a year into the game versus later. But like, so traditionally what I thought is, yeah, so you’re going to tackle, you’re going to tackle that high interest rate, like above 10%, right.
[00:28:33] Because in essence, there’s, there’s really nothing that will ever return more than that, usually with guarantee. Right. the savings account makes a lot of sense, right? You’re going to start to develop your six months to one year, whatever timeline you’re looking at for your savings account.
[00:28:49] Traditionally for that, at that point, it’s, you’re, you’re filling up your 401k or B what have you, and you’re doing it. and then you might tackle whatever you know, the next tax bracket or loans or what have you, but real estate is pretty early for you. And something that I know we wanted to talk about.
[00:29:13] Dr. Taylor Brana: I’m super curious by the way, like this is an area I haven’t really done too much work in. I know there’s a lot of, but I would love for us to kind of hash out, like why is real estate? And again, this might be a little different now with COVID. Why is real estate like higher on your list as the next order of things that you’re going to work on?
[00:29:32] Dr. Jordan Frey: Yeah. And initially when we initially visited the planet, it wasn’t because we didn’t know as much about it or really anything about it and were exposed to it. but then we did a lot of things, we kind of. Randomly got exposed to it through rich dad, poor dad. And then I saw a semi retired MD or a married couple that invest in real estate.
[00:29:55] I saw a talk that they gave online that I just sort of randomly came across. And so then we started saying like this kind of keeps coming up. It doesn’t really seem like it’s something that we’re. Going to do it. Cause it just seems like it’s a big thing to tackle, but we might as well learn about it.
[00:30:14] And then the more we learned, we were like other people, other doctors have done this. Why can’t we and. It’s really, I think like an incredible vehicle because it offers a number of different advantages. Now I’ll start by saying different ways to invest in real estate. The way that we do it is by buying properties, that we then rent out so that the renters pay our mortgage and then they pay all the expenses and then they pay.
[00:30:46] Even more above that, that goes into our pocket as cash flow. So we’re making money that way. And then we’re also making money because they, like I said, they’re paying off our mortgage. So we’re getting equity in that manner. And then there’s also huge, huge tax benefits, especially. For physicians.
[00:31:06] and without getting too into the weeds there there’s something you can qualify for, which is called real estate professional tax status, which essentially once you get that, you, you can claim huge losses on your real estate because of something called the appreciation. So even though.
[00:31:24] This property that we have every month is putting money in our pocket. According to the government, real estate loses value every year. So even no, again, it’s putting money in our pocket on paper. It looks like it’s losing money. So that those losses, once you have this special tax status can be used to shelter.
[00:31:45] Your income. and we don’t have that yet for, in 2021 for my wife to have that tax status. But for instance if, if I Let’s just say, the average doctor has $200,000. They make $200,000 a year or whatever. and with the real estate, they’re able to buy right off from depreciation, a hundred thousand dollars, well then they only have to pay taxes on a hundred thousand dollars of their doctor income.
[00:32:15] And that’s a huge difference. Like if, if their effective tax rate is 25% or something, that’s Tens of thousands of dollars that are back in their pocket. so
[00:32:28] Dr. Taylor Brana: Let me, I want to clarify this for a second. Cause that’s, that’s like a crazy idea to me. So let’s say you have a $400,000 home. You’re making payments towards whatever, right?
[00:32:38] It’s depreciated to three 50. You’re telling me that if I made 200 K because my home lost 50 K I can say I essentially made one 50 K and I’m taxing the one 50.
[00:32:51] Dr. Jordan Frey: Exactly. Yeah. If you have, if you have the special. Tax status. If you don’t get it.
[00:32:59] Dr. Taylor Brana: Is it hard to get that status if you, if you want it?
[00:33:01] Dr. Jordan Frey: No, it’s like one of those things, when, when you first hear about it, you’re like, how am I going to do that?
[00:33:07] But if you decide you want it, then you’re going to get it. And with that advantage, it’s worthwhile. So the way you get it is, so let’s say, you know Yeah, my wife works well. Let’s say for the sake of argument, she didn’t work. She took care of the kids and would then need to qualify.
[00:33:26] She would have to spend over a year, 750 hours. On the real estate that doesn’t mean she’s like swinging a sledge and stuff like that. She could be looking for properties analyzing properties, supervising contractors that are doing repairs collecting rent, going over the spreadsheets each month and things like that.
[00:33:50] if you have another job, like if it was me and let’s say I worked I don’t know, I’m just making up numbers, but a thousand hours a year as a doctor or something, then I would have to work a thousand and then one on real estate in order to qualify. So that’s where it’s harder. But what I’ve heard a lot of doctors doing, it’s not going to be my approach because my wife, you know, wants to go for it.
[00:34:19] And it just works out better in her situation. But you can actually kind of find that break, even point of like, okay, if I go back to halftime, And focus the rest of my time on real estate and get that real estate professional tech status. I’m going to shelter my income, such that what I make is actually more than if I was just working full time as a physician and paying all those taxes.
[00:34:45] Dr. Taylor Brana: It’s like a very interesting idea. So, I’m just trying to summarize this. So there’s real estate professional tax status that someone can get. They need a certain hourly requirement that they’ve hit. In a year and once they’ve hit that requirement, they can get that status, which then allows you to essentially know how’s or, or use the depreciation cost to essentially reduce the amount you have to pay taxes.
[00:35:11] Dr. Jordan Frey: Exactly. Yeah. So that’s a really powerful thing, but even without that, cause sometimes people, their physicians are like, I don’t necessarily want to cut back and. Achieving that many hours will be tough even without that real estate has like it’s, it’s worthwhile. Definitely without that those tax advantages are huge, but just the fact that you can have something that every month is putting money in your pocket and also is increasing your net worth.
[00:35:38] By your renters, paying off your mortgage is huge. And then with our strategy, the real estate market is a lot like the stock market. In the sense of, in the short it’s very volatile, but over the long term, it tends to increase. So we buy and hold properties. So we’re not flipping or we’re not looking to sell our property in a year or something like that.
[00:36:00] And if we hold onto it for Five 10 years. It’s going to go up again. We’re not banking on that, but that’s kind of like the same argument with index funds. You’re just sort of, that’s the safest bet. so that’s another way that you can make money and then those games you make can be tax-free when you exchange it for a new, bigger property, which then is going to put more cash in your pocket and that’s, it, it kind of just really snowballs.
[00:36:28] Dr. Taylor Brana: So real estate money you make on real estate, essentially you can reinvest into other properties and you don’t have to pay taxes on it.
[00:36:36] Dr. Jordan Frey: Exactly. Yeah.
[00:36:38] Dr. Taylor Brana: Which is pretty, I mean, that’s, that’s very impressive. Cause you know, again, like it, that’s not as immense if it’s smaller properties or less money, but when you’re talking about hundreds of thousands of dollars or millions of dollars with the properties, the tax advantages there start to become ridiculous.
[00:36:57] Dr. Jordan Frey: Yeah, exactly. No, it’s huge. And like, and that’s how you get Cause people initially we, we bought a duplex. It’s not like we’re real estate barons or anything. It’s just a duplex. And then that was like a hundred, I think 175,000. We can, we can wait and we’ll get cash in our pocket and we’ll get people paying off their mortgage.
[00:37:22] And then we can sell that and then tax free. We can use all that for a down payment on. You know, a $600,000, 10 unit property or something, and then you just exponentially keep growing. and that’s really the great thing about it.
[00:37:37] Dr. Taylor Brana: Yeah. I mean, The math. I mean, if you’re not a math person, it might not make sense to you, but like my mind has gone kind of crazy right now, because that is a particular advantage.
[00:37:48] you know, obviously it’s not this conversation for us to dig into all of the ways you could use real estate. Cause that’s, that’s a crazy topic. Yeah. But what resources have you used to educate yours? Like what have you been using books? Have you gone online? Like what resources, resources are you using to educate yourself on the real estate tips?
[00:38:09] Dr. Jordan Frey: Yeah, I use a lot if I’m interested, definitely the first book to read about rich dad, poor dad. That that, again, it sort of philosophically lays out why real estate is such a great investment and motivated us to get into the, the best light step-by-step how to book. And it also goes into mindset.
[00:38:30] It’s a fantastic book. It’s called the millionaire real estate investor by Gary Keller. And then we do read a lot of blogs. I think the best one, one is a semi retired md.com. Yeah. And they have a course that my wife and I took and loved a lot. Another excellent resource is his name’s Dr. Corey Fawcett. he’s written a number of books. He also just came out with a course about real estate investing that we took as well. Those, those are in, in my mind, like the best ones. Those are the main, main ones we use
[00:39:12] Dr. Taylor Brana: and it’s look it’s really important. Cause you know, one of the reasons I.
[00:39:15] Want to focus on this as you know, the happy doctor, the idea of not just happy physicians, but anyone who wants to live a happy life again. if you don’t know these tricks or these ways of developing wealth, you’re going to get nickeled and dimed on every part of the process. And of course, taxes are important and we want to do that.
[00:39:34] But at the same time, We also want to make sure that we’re developing our own ability to have a wealthy life and give to people in the way we want to, as opposed to being controlled because we’re stuck in our finances.
[00:39:48] Dr. Jordan Frey: Yeah.
[00:39:50] Dr. Taylor Brana: It’s a crazy world. And again, it’s in this case with, with money knowledge is power and the application of the knowledge You know, will exponentially with a compounding effect, just change everything.
[00:40:07] So I think this is a really powerful conversation. I don’t want to go in depth again, but you know, the other side to it that we didn’t hit is investing. So what are some general guidelines for investing? Are you, are you totally in real estate or are you kind of diversified in some investing as well?
[00:40:25] Dr. Jordan Frey: Oh yeah. We also invest. So we’re sort of like a hybrid model . Everyone’s always like either real estate or index we’re kind of in the middle or real estate or stocks, which I just gave away my strategy. but the, and that’s basically a, in terms of like stock investing. Very boring.
[00:40:46] Like I truly believe in sort of the you know, market efficiency and just there’s all these people on wall street with super powerful computers, trying to find all of these sort of mismatches in terms of value of stocks and what the next best thing is. And I don’t, I definitely don’t think I can do that.
[00:41:04] Better than them. And I don’t even think they can do a good job of it. So I just try to invest in them the whole market basically, and just let time do its thing. So again, it’s all in, in one of the posts on my blog, I have my asset allocation and everything. I’m trying to remember it off the top of my head.
[00:41:23] That’s how much it’s just kind of Senator forget it, but it’s 80% stocks, 20% bonds. And then the stocks are split off you know, between like some international and us, but it’s a pretty basic one and I’m just content to kind of let time do its thing. And if, if. The market, like completely crashes, then we’ll have worse things to worry about than our money.
[00:41:47] Dr. Taylor Brana: Right. Well, that’s the thing, that’s the argument, right? Like if, if, if you truly believe that the entire market’s going to crash, when you’re in index funds, then we’re going to be screwed anyways.
[00:41:57] Dr. Jordan Frey: Yeah. It’s going to be apocalyptic. So,
[00:42:00] Dr. Taylor Brana: yeah, it’s a terrible thing to say, but like, you gotta do, I guess you could hedge it.
[00:42:05] Like the other guests I had on he’s been hedging his Cause he’s not sure what’s going to happen. He’s been hedging slightly using crypto. So like he’s been putting like a small, again, this is someone who’s already had attained financial freedom, so it’s a little bit
[00:42:21] Dr. Taylor Brana: yeah, but I thought that was, that was really interesting.
[00:42:23] Are you a Vanguard or fidelity guy or a different team?
[00:42:29] Dr. Jordan Frey: Vanguard. Yeah, I wish I don’t have Vanguard through my job. There it’s actually TIAA just cause they had the best, you know, options of all of them. But, but for my own sake, I like Vanguard.
[00:42:43] Dr. Taylor Brana: Yeah. Yeah. I also have Vanguard, but I know I just recently watched a video, like fidelity has really good, like index funds with low… like the other thing too, a lot of people don’t realize.
[00:42:53] I mean, again, we’re not gonna go into the weeds here, but like the cost, I think it’s like the cost ratio or how much they charge you per X amount of dollars that you invest. and that’s also really important, so
[00:43:06] Dr. Jordan Frey: Yeah, absolutely.
[00:43:07] Dr. Taylor Brana: So Dr. Frey, we’ve been, we’ve been talking about finances. We’ve been talking about being financially.
[00:43:13] Well, I think we’ve hit a lot of topics here and you obviously have a great resource as well, but before we get to that, was there anything in this whole conversation that you want to make sure that our listeners really you know, know about their, their wellbeing in terms of finances?
[00:43:30] Dr. Jordan Frey: Yeah, I think for me What I try to pass on to everyone.
[00:43:34] And it’s like, it’s not as, as a physician, it’s not dirty or it’s not taboo to worry or care about your finances or think about it or plan for them. I used to think that, and I think there’s a lot of people and especially a lot of you know, maybe some of your attendings or mentors that you’re around that, that they’ve sort of dropped the ball a little bit.
[00:43:56] And a lot of times the excuse for that can become like, well, I didn’t go into this for money or I’m not worried about that. I’m just worried about the patients, but those things aren’t mutually exclusive and. I used to think that, and that was totally wrong because when I started focusing on my financial wellbeing, I became a better doctor because I was able to focus on the patients more.
[00:44:17] Cause I wasn’t worried about. You know, if I was going to be able to pay our credit card that month or something like that. So it’s not, it’s not bad to do. And the other thing is just get started. It’s going to seem scary. I procrastinated for so long because I was just scared to look at my mistakes, but just get started.
[00:44:36] And it’s a lot easier than it seems.
[00:44:39] Dr. Taylor Brana: Absolutely. No, I love that tip. And I think you know, at the, at the end of the day, It’s going to be that you’re going to have to not only learn this knowledge and you’ve, again, provided so many resources, but you’re going to have to apply the knowledge. Right. And, and I think just getting started, starting to take those, it, what, what I didn’t realize is it really is compounding, like the habits, behaviors and the actions you take like compound and you better start implementing them when you make some real money.
[00:45:11] Yeah. Again this from real life experience that those habits will absolutely either make you or break you if you don’t implement.
[00:45:21] Dr. Jordan Frey: Yeah. 100%.
[00:45:24] Dr. Taylor Brana: So Dr. Frey again, I’ve had you on for quite some time today. Awesome conversation. I think this is going to be like a great episode for sure. For the basics, but also I think even as we’re talking about it, you’ve given me some, a little bit more advanced things to look into and, and take a look at other areas of investing in all of this.
[00:45:42] So I really appreciate your time. That was really great. How do people reach out to you and find you?
[00:45:48] Dr. Jordan Frey: Yeah, thanks. I had an awesome time as well. The best way is anyone can email me, [email protected]. And then my site is www.prudentplasticsurgeon.com. And you can reach me through there as well, but definitely I’m pretty good at getting back to emails.
[00:46:10] So definitely any questions, anything I can do feel free to reach out.
[00:46:14] Dr. Taylor Brana: Awesome. Well, thank you so much for your time. I really appreciate it. And that was great. You shared so much you know, I’m sure we’re gonna have lots of questions at some point. by the way, if you have any frequent questions or questions that come up, maybe we’ll go on for part two, just to go a little bit more in depth.
[00:46:33] but again, this is. This can’t be talked about enough because no one’s talking about ever and yeah. Yeah. There’s no other way to learn it. And no one’s teaching us these life skills that are really actually going to set you up for success. You’re taught all of the clinical knowledge or whatever profession you’re in.
[00:46:53] You’re taught that knowledge, but no one’s telling you how to free yourself. And no one, no one’s teaching you how to open up these options for what you can do in life. and so I think it’s just absolutely, again, super important, very important for happiness. So Dr. Frey, thank you so much for being on today and I hope you had a great time.
[00:47:12] Dr. Jordan Frey: Yeah, it was great. Thanks for having me. Awesome. Take care.
[00:47:17] Dr. Taylor Brana: You too
2 thoughts on “Chatting All Things Financial Well Being with The Happy Doc”
hey dude yeah I love the interview! did you ask Taylor is he’s taken a lot of prozac or something? dude really is the happy doc!