Being a black belt in finance means to have a net worth of a million dollars. Just like a martial arts dojo, Your Money Geek is a place where we can learn about personal finance and eventually become financial black belts ourselves. In this series, we get to hear the stories of actual millionaires and see what it took for them to get to that level. Now for the interview:
What degree black belt are you? (e.g. one million = first degree, two million = second degree).Even a conservative estimate of our net worth would be an 8 figure amount, so we'll say I'm a 10th degree.
However, if you ignore that, about 15% of what's left is our paid off home and the rest consists of our investments which are 60% stocks, 20% bonds, and 20% real estate and small business investments.
Give us the break down on your current net worth. What is it invested in and do you have any debt?This is a hard question to answer because the majority of our net worth is tied up in our business, The White Coat Investor. It probably makes up between 50% and 80% of our net worth, depending on how it is valued.
How was your childhood? Was your family wealthy, middle class or low-income?Everyone thinks they are middle class or at least once were, including me. My father was an electrical engineer, mother was a stay at home mom, and I grew up in a suburban neighborhood in Anchorage, attending public schools and eating peanut butter sandwiches at school. My parent's contribution to my eight years of education (aside from plane tickets home and free room and board at home in the summers) was less than $1500. I donated plasma to buy food in college and took out a $3,000 loan from my parents for my first car (a Geo Prizm) as a college senior.
Did you go to college?I attended Brigham Young University on an academic scholarship, played on their club hockey team, worked various jobs, climbed rocks, met my soon to be wife, and busted my butt to get into medical school. I then attended the University of Utah School of Medicine where I was a student body president and spent entirely too much time playing foosball. I then spent three years at the University of Arizona as an emergency medicine resident physician prior to a four year stint in the Air Force.
What is your fighting style? (Career path from first dollar ever made to present).My first million came entirely from working as a physician and living like the average American. While I continue to practice medicine, the bulk of our net worth has come from growing The White Coat Investor into a multi-media company that seeks to help doctors and other high income professionals stop doing dumb stuff with their money.
Would you recommend people to pursue the same career path? Would you choose a different job if you could go back?I still think medicine is a fantastic career, despite all of its many problems and I would do it all over again. Certainly a physician gets paid enough that if she will manage her money well she can retire easily (and early) as a multi-millionaire.
The best known one is The White Coat Investor, although I suppose it is now the main hustle and medicine is the side hustle or well-paid hobby.
Have you had any side hustles?
If you have a spouse, how have they contributed to your net worth?Katie helped us to minimize debt in school and was the higher earner until she became a stay at home mom when our first child was born. For the next 10 or 12 years, her role was primarily supportive. Because she was taking care of everything else, I was able to focus on my physician career first, and then building The White Coat Investor. For better or worse, The White Coat Investor has grown so much that she has now taken on a much more active role with it, handling book sales, online courses, conferences, hiring decisions, promotions and other areas.
What has been your investment strategy?Primarily index funds but with a bit of real estate and website investments.
Who was your financial sensei? (Most influential person/source of information in your financial life).William Bernstein, MD, author of The Four Pillars of Investing.
Are you pursuing FIRE (financial independence/retire early)? If so, how much money do you plan to retire on and are you going to quit working for money altogether?By any reasonable measurement, we are already financially independent. I have no plans to quit working at the present. I always liked to think I wasn't working just for the money and I guess the fact that I haven't quit yet means I wasn't lying.
Mind over matter
Do you think psychology plays a more important role than math with finances?The behavior is definitely harder than the math, but probably isn't any more important.
What was your toughest mental opponent on the path to your black belt?I think I probably struggled with a bit too much of a scarcity mentality for too many years rather than an abundance one. Looking back, I think too many people (including younger me) routinely and severely overestimate the difficulty of doubling their income.
There are a lot more financial white belts than black belts out there. How do you think differently than the average person when it comes to money?I think long-term. Plus, spending money is a bit painful to me. That's why I use credit cards–the studies are quite clear they help you spend more because it is less painful to do so. Still, despite the pain spending lots of money doesn't seem to be all that hard for us to do, but we've become masters of delaying our spending. We're basically always living at our previous income despite earning at a new higher one!
Money is a wonderful tool, but a terrible master. Nevertheless, I think it is wise to learn how to earn, save, invest, spend, and give well.
What does wealth mean to you? Should everyone pursue it?Wealth is basically net worth. The higher your net worth, the more wealthy you are, at least in financial terms.
Should people follow their passions or just do something practical?I suppose a balance should be kept while you pursue the ideal- something you love that pays you very well. Maybe not every one can find it, but I bet a lot more can than think they can.
What is your weapon of choice? (favorite money tool/app)A simple spreadsheet like Microsoft Excel. It is an incredibly powerful tool.
What has been your favorite way to earn money?The ones that work while I'm asleep or on vacation AND really make a difference in others lives. For example, check out my student loan refinancing resource page. If you refinance through the links on that page, not only do I get paid, but you get a lower interest rate (saving thousands), better service, AND you get paid a few hundred bucks too! Now that's a win-win if I've ever seen one.
What’s your favorite way to use money?I enjoy a great wilderness adventure. In July, we rented rafts and floated the Salmon River for example. I thought that was a great use of $1,000.
What’s your one piece of money advice to us financial underbelts?Work on both offense (earning more) AND defense (spending less, investing well, and insuring adequately). Too many readers of financial blogs focus too much on defense.
Nathan has been a personal finance writer since early 2018. He and his wife reached a net worth of one hundred thousand at the age of 25 and are on their way to financial independence. His favorite way to make money is selling things on eBay and has grown his eBay business to earn five figures selling part-time. He loves sharing what he learns about finance and any eBay tips he comes across. If you’re interested in becoming an eBay seller, check out his reseller Facebook group.