Being a GP is a huge privilege and with this comes a great responsibility. Not only for my patients, but for myself. Stories of burnt out doctors are in the news with a regularity that is deeply upsetting.
And don’t even get me started on the suicide risk of doctors.
So I believe that thinking about number one is not a selfish act – in fact, this is one of the best ways that I can ensure that I am present for my patients.
What am I talking about?
Of course, being the Female Money Doctor, I am talking about MONEY!
When money becomes a problem in anyone’s life, it affects every aspect of it. It has actually been proven that lack of money reduces IQ. This is purely because when someone is living on a knife edge, they literally cannot think of anything else properly.
Lack of money makes our problems harder to solve and restricts what we are able to do.
So if you happen to be a doctor (or any professional quite frankly) in debt, your decision making may be impaired. Now I’m not saying that this means you are dangerous at work – absolutely not. I’m talking about the more subtle issues that go on.
Let me use myself as an example.
My Debt Mistake
I have carried a lot of debt since medical school. Taking on a huge student loan to get my through university made taking on more debt easier to do. I was already in debt, so why not add more.
It’s like being on a diet, having a slip-up and then thinking “what the hell” and eating badly for the rest of the day. Except my “day” lasted 10 years!!!
It was a slow process – debt was creeping up around me and I barely noticed.
At my lowest point, I thought I would miss mortgage payments because I could no longer afford to keep up with myself.
In order to get through it, I worked like a woman possessed. Sometimes I would work 7 days a week to make ends meet. Luckily for me, I was able to persuade a bank to consolidate my (rather large pile of) debt, and this reduced my monthly outgoings by slashing my payments down by 50%.
It increased the length of time that I would be paying off the debt, but suddenly I had room to breathe.
With the extra money, I was able to build up an emergency fund, have fun, AND pay all my usual household bills. I am now slowly paying down my debt, and officially it’ll be done in 4 years, but I want to do it in 2.
Living On The Edge
When I had a lot of outgoings, I was living on a knife-edge. A gust of wind in the form of a significant financial stressor would have blown me down like a house of cards. My money situation was all I could think about. Not patients. Yes I believe myself to be a safe doctor, but I’d be lying if I said that I was doing all those shifts for the patients. I worked tired all the time and didn’t see my family (which still has a lasting impact even to this day). I resented every extra shift, every weekend, and every late night.
In short, I was miserable and burnt out.
This is what being in debt does. It robs us of our time, our freedom, our social lives, our family, our health and our brain-power! How can we be fully present with all the money stress going on in the background?
Something I noticed when I paid off significant portions of debt was that I actually started to enjoy work again. I no longer needed to work quite so many hours and this gave me more free time.
And it doesn’t have to be debt that’s the problem! The same applies with lifestyle creep.
Don’t Be A Creep
I was having a discussion the other day with a fellow GP trainee. She asked me what I thought about private school for her primary school age children. She wasn’t the first one to have asked this question.
“How long do you want to be working ridiculous hours for, and how much are you willing to sacrifice in order to send your child through private school?”
I have seen so many doctors do this, only to then trap themselves into a lifestyle they cannot afford unless they work all the time.
Large houses (with a mortgage), big cars (on finance) and private schools (that cost more than the average UK medical school). All of these things require significant monthly salaries. How many hours do you want to work? For how long?
But thankfully there is another way.
The FIRE movement comes to the UK
I recently had the opportunity to meet with a group of very interesting American physicians who had one focus on their mind – to teach financial independence to the masses in America.
FIRE stands for Financial Independence, Retire Early. It is a movement that has been gaining speed in America, and is now in the UK too. Essentially, the aim of FIRE is to get to a stage financially where if you chose to, you could give up work and no longer need to do anything active to bring in money every month to live.
Is this the holy grail?
For many people in a career they have worked hard for, the idea of giving up is difficult to imagine – myself included. Being a doctor, with the sacrifice it took to get to this stage, has become so deeply embedded into my personality that it’s hard to imagine doing anything else, let alone stop working altogether.
Yet the FIRE movement doesn’t actively encourage early retirement. Instead, FIREists (is that a word?!) argue that financial independence leads someone to freedom, and therefore the ability to choose how they continue to work (if they want to).
Being financially independent means that YOU have the control.
No longer want to work Mondays? Fine – you don’t have to.
Want to drop your hours so you can take up some not-for-profit charity work? With no money worries; you can!
Do you have an idea for a new business? Well guess what, you’re free, so go ahead and do it!
Can you imagine this as your reality?
This is absolutely possible, but the speed at which an individual can achieve this will be fully dependent on their circumstances. FIRE purists in America would advocate putting 50% of their income at least to their retirement fund. Well this is all very well and good, but if your 50% is someone else’s 100%, then that other person is going to struggle.
So What Can You Do If Saving/Investing 50% Isn’t An Option?
If a lifestyle of freedom of choice sounds appealing, then there are plenty of ways to achieve it, but it will be a mix of the following things:
Know your numbers
you need to be aware of your current net worth and where you need it to be in order to retire or reduce your working hours. Without a direction, it’s hard to know where you’re driving to. How much money is enough for you and your family?
For example, an individual who wants one day off of work a week to spend time with their family is going to need far fewer assets to pay for this than someone who wants to retire completely.
Knowing your numbers is powerful. It can help you set a budget, make savings on your bills and spot problems before they arise.
How are you going to translate your target net worth into an income? Do you know how to invest, and what to invest in? Are you going to put money into property or the stock market or something else? Maybe a combination of all of these?
If you don’t know what the beep I’m on about, then you need to do some reading!! Educate yourself on how to invest by reading about it or join a course. However you want to learn, you need to start somewhere.
Get Out Of Debt
That retirement income will go to waste if all you’re doing is putting it towards debt repayments. So to achieve FIRE in whatever form it looks like to you, you need to not be in debt and pay off your mortgage. Seem impossible? Well then you need to focus on a debt-repayment method like the snowball or the avalanche.
But don’t expect this to be a fast process.
For some people with disposable incomes to burn, they can become debt free very quickly. But for others, it will take much more time. If you’re not keen on investing, paying off all your debt is a very good way to improve your net worth (but you will still eventually need to learn how to invest to get to freedom).
While you’re getting out of debt, you absolutely cannot be getting into more! Financial disasters come in all shapes and sizes, so be prepared for it all. Build up a savings buffer so that if there was a problem, you’d be able to handle it.
This might be in the form of life insurance (if you have children for example), incapacity benefit (especially if you are self-employed), and an emergency fund (£1000 for small disasters, 3-6 months of income for big disasters).
This must be done WHILE paying off debt. There’s no either/or option here. Bring in more money if you have to – whatever it takes! Check out the 1p challenge and the £1000 emergency fund challenge for ideas on how to help you do this.
Start a Side-Hustle!
Even the BBC have cottoned on to this one. Just recently they spoke about the “side-hustle economy” on breakfast business news. They quoted stats from Henley Business School. Apparently 1 in 4 of us are running at least one business on the side to our main job!
This blog is my side-hustle. It gives me something different to do outside of medicine. I have a creative outlet for stress relief, and I enjoy my main work as a consequence. Ideally I want my blog to bring me in enough money to cover me for 2 days a week so I only need to work 3 as a doctor. This would be financial freedom to me. It’s not an easy business to have by any stretch, but it’s fun trying.
What could your side-hustle be?
So yes, these things take a considerable amount of effort and focus. To raise an emergency fund and free up money to pay off debt, you’ll need to budget and make sensible decisions about your spending habits.
You’ll need to have a decent gap between what you spend and what you earn.
The good news is that these are not beyond your reach! The difference is that you may need to take longer to achieve financial independence than a single man with an above average salary without any children. And don’t forget that your net worth target will be different too.
Don’t accept the status quo. Financial independence means picking your own path in life. It can mean whatever you want it to mean!
Who knows what you might then be able to achieve? The world can be your oyster.
Food for thought?
Until next time,
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