Today’s guest is a third degree black belt hustler. Dr Cory Fawcett is an accomplished surgeon, author, blogger, public speaker and financial makeover coach. He has written three books on the Amazon best seller’s list: The Doctor’s Guide to Eliminating Debt, The Doctor’s Guide to Starting Your Practice Right and The Doctor’s Guide to Smart Career Alternatives and Retirement. He has been involved in more than two dozen business and real estate ventures. Needless to say, the man can hustle. He’s now using a lifetime of experience to help fellow physicians get out of debt, take control of their practice and enjoy their lives.
What is your specialty and where did you practice?
I am a repurposed general surgeon. Having grown up in Southern Oregon, after my training I returned home to join a practice a half hour from my parents, who still live in the house in which I grew up. After practicing 20 years in a small town, single specialty private practice, I was ready to scale back. Unfortunately, part-time was not an option in my contract. In order to work part time, I left that practice and became a locums surgeon, working half-time in critical access hospitals in the Pacific Northwest. My intention was to give the surgeon who worked 24/7 at those hospitals a needed break.
During the three years I was in locums, I began writing financial books for doctors.
During my final locums year, I tapered down to one week a month. I then felt ready to leave surgery and continue with my new mission, teaching personal finance to doctors. I learned some interesting things during my first six months of retirement and wrote about them here.
Some people are natural-born workers. Given your resume, I’m guessing you’re one of them. What was your most interesting job before becoming a physician?
My most interesting job was as the lead singer, guitarist and manager of a rock band. Those five years were a very memorable time in my life. Running that band as a business was also a great learning experience. One of the highlights from those years was playing for Vice-President Mondale when he came to town.
I later recorded a solo album of original music. I didn’t become famous or sell millions of albums, so I continued my studies and became a surgeon. I still play music on a smaller scale by leading worship at church, playing for occasional events in town, playing the lead in a musical, singing in a gospel quartet, playing and singing Christmas music at nursing homes, and I once even wrote and recorded the musical score for a short film.
Music is a great hobby to give me a break from medicine. I think we need hobbies to keep us sane and avoid burnout.
For most doctors, having a successful medical practice is “enough”. At what point did you realize you wanted to branch out into your various side hustles?
My first big side hustle was real estate. Having worked with my grandmother on her rentals as a teen, I planned to follow in her footsteps. After we became debt free, about eight years out of residency, we began purchasing investment real estate. Since no one can practice medicine forever, I knew that at some point, my income from medicine would end. Real estate income keeps going whether I work or not and I wanted this passive income in my portfolio.
We began buying small apartment buildings, 4-31 units, until we had accumulated 65 units. At that point, my wife put her foot down and said we had enough rentals. Once you have enough projected passive income to cover your cash flow requirements in retirement, there’s really no reason to acquire more. You have to learn when to say enough.
I managed the apartments, while I was still a full-time surgeon, and my wife took care of the books. We were able to pay down the mortgages and raise rents over time which steadily increased our cash flow. About 12 years after we bought the first apartment, the cash flow had grown enough to cover all our personal expenses which made it possible for me to retire from medicine. That’s when I transitioned to part-time. Since we now travel a lot, we turned that side hustle over to a property management company. Now our real estate business generates true passive income.
My second side hustle was teaching personal finance to doctors. My wife and I taught Crown Financial Ministry classes for several years. That course was aimed at the average income American. I noticed that the higher income students, such as doctors, did not seem to relate as well to the material because both their income and debt were so much higher than the average American. Doctors would say that nurses could pay off their debts quickly because they haven’t acquired as much debt as doctors. Nurses would say that doctors could pay off their debts quickly because they have such high incomes. Both groups found a reason why it would not work for them, but would work for others.
I decided to write a financial book series for doctors, with numbers and language they could relate to. If I could do it, so could they. I’m very happy to report that each of my books have won awards and become Amazon best sellers.
I also provide one-on-one financial makeover coaching, a weekly blog, Tweets, Facebook and YouTube videos, and key-note speaking. I seem to be just as busy with this side hustle as I was with my medical practice, but without the pager or an alarm clock. Because of that, I don’t call myself retired, I like to say I’ve repurposed.
What is a financial makeover coach and what made you go into this line of work?
Many doctors can read books, implement the information, and transform their financial lives. Others need a helping hand and someone to keep them accountable. For those doctors, a coach can be life changing.
About 12 years ago I realized I had turned into a couch potato. I decided I wanted to get back into shape. One night while watching the Biggest Loser on TV, I realized that the only time I was in top shape was when I had a coach. In high school I played sports all year long; football in the fall, basketball in the winter, baseball in the spring and summer. When I had a coach pushing me, I worked harder. So I went to the local gym and hired a personal trainer and got back into shape.
Just like I needed a coach to get my body back in shape, many doctors need a coach to get their personal finances back in shape. Knowing what to do and doing it are not the same thing. Just like in my case, most people know what it takes to get in shape, but they just don’t do it. I take doctors through a program to help them become financially fit. We work together to establish a spending plan that accomplishes their goals of getting out of debt, saving for retirement, having the right insurance, and covering their children’s future, among other things.
As a coach I take them step by step through the program. I help them make tough decisions, keep them accountable, and encourage them every step of the way. By the end of the program, they have a good financial plan in place and know how to adjust it as circumstances change throughout the rest of their lives.
Your business experience, successful book series and speaking appearances are the perfect CV for a financial makeover coach. What advice would you give a physician who doesn’t have all those credentials who wanted to get into coaching?
The most important factor for someone to become a coach is to choose a subject they are passionate about. If they really like it, they also likely have learned more than the average person about that topic. Everyone has different strengths and weaknesses. The key is to find a strength and learn how to teach it
As I look back at my life, I was often teaching or coaching. I have coached youth baseball and soccer, given piano and guitar lessons, taught real estate investing, instructed medical students and residents, given personal finance classes, and taught many things to my kids. We all do some teaching and coaching throughout our lives so it shouldn’t be too difficult to do it now.
Taking courses on coaching is also helpful. I took a course to become a Certified High Performance Coach, which helped me become a better financial makeover coach. I also watched video courses and read coaching books that helped me become a better coach. There are a lot of resources and courses available at the library and online to help you become a better coach. Various organizations also offer coaching certification.
Who are your typical clients?
My coaching clients fall mostly into two groups:
1: Doctors who are in their first few years out of residency. These doctors want to get the right start in life. They have a new high income and want to learn the best way to use their new income to meet their goals and pay off their student loans. Many are considering buying a house and are seeking guidance for this important purchase. They want to work out a spending plan that will get them everything they want in life; a nice house, a comfortable retirement, and nice vacations.
This group is the most fun. They are just starting their career and haven’t made many money mistakes yet, so they don’t need much damage control. Getting this doctor pointed in the right direction is very rewarding and has a huge impact.
2: The second group is the later stage doctor who is realizing they earn a lot of money but never seem to have the money to do the things they want to do. These doctors have often been making expensive spending decisions for a long time that are finally catching up with them. They are realizing that if they stay on their current trajectory, they might never be able to retire with the lifestyle they desire.
This is the tougher of the two. These doctors require damage control. They may even require some big lifestyle changes to achieve their goals. At this stage, it is difficult to convince doctors to make the needed changes. For example, they may need to downsize their McMansion, take their kids out of private school, scale back on their lavish vacations or sell some of their toys.
Many of these doctors initially want me to show them how to get everything they want without making any lifestyle changes. It takes a while to get through to them that if they want different results, they will need to take different actions. Scaling back at this point is very difficult for many doctors. When we look things over and tell them they can’t afford that house, or private school or half million dollar boat, it’s often not taken well.
They do have a lot of money running through their hands but it is not enough for everything they want. This is where the spending plan comes into play. They can use it to identify where their money is currently going and then tweak it to channel their money to their goals. They can have many great things, just not every great thing. It’s a matter of choices and as a coach I help them see their options more clearly.
What are some of the most common financial mistakes you see physicians make?
The most common financial mistake I see physicians make is thinking they are “rich” enough to do anything they want to do. When their income jumps after training, it sure does seem like they are rich. But in reality, it’s not nearly as much money as they think, especially with a huge pile of student debt to tackle.
Often, there is one big item in their spending plan that creates most of their financial troubles. The most common is too much house. Buying a big house, impacts the money that’s available for everything else for many, many years.
The misuse of debt is another common problem many doctors face. They have the misconception that if they can borrow at a low interest rate, it’s a good thing. But they then get into the habit of financing everything. So each big ticket item they buy will have a bunch of extra interest tacked on. Each time they finance an acquisition, it means some of next year’s income is now spoken for and won’t be available for new purchases next year.
It seems absurd that someone making $25,000 a month would have to borrow money on a credit card. Yet many doctors who contact me have unpaid credit card debt. Their out of control borrowing ends up causing them to make other bad decisions. They stop paying their taxes or don’t buy needed disability and life insurance, or stop saving for retirement in order to service their debt payments. Maybe if we all realized that the Dr. Joneses are broke, we wouldn’t try to keep up with them.
Whether we like to admit it or not, doctors’ identities are deeply connected to their medical career. You’re an award winning author. You get paid to speak all over the world. You coach fellow physicians and have a real impact on their lives. Despite all this success do you ever find yourself missing clinical medicine?
I was very worried about missing clinical medicine before I retired. That was one reason I worked part time before finally retiring, I was afraid to stop. Slowing down gradually allowed me to cut back on my work load until it was easy to let go completely. Once I reached that point, I surprisingly did not miss it at all.
I think it was important for me to have something else productive to do after I left medicine. Many doctors who quit working without a plan are back to work within a year because they miss seeing patients or they are bored. Having a plan is key.
There was one hour that I did miss clinical medicine though. My wife and I were watching a Hallmark movie about a young doctor in a small town. As I watched the movie, I began to miss all the rewarding parts of being a doctor. I mentioned this to my wife. She then reminded me of all the reasons I chose to retire from medicine, and the feeling passed. You can read the full story about that moment here.
It’s been a year and a half since I saw my last patient. It seems so distant now that I can’t imagine going back. My new freedom would be very hard to give up. Today, I get up without an alarm, I work when I want and where I want, and no one calls me after I go to bed. I have developed a new normal, a new mission, and a new identity. I don’t miss my old life.
You recently wrote a guide about tapping into an IRA before age 59 1/2. For those of us aspiring to retire early what advice would you give about determining a FIRE number?
The first thing you must do to determine a FIRE number is make a spending plan for retirement. In order to FIRE with confidence, you must know exactly how much money you will be spending in your retirement years. Without this information, you are just making a wild guess and you will be unsure and afraid to pull the trigger when the time comes.
Start by making a spending plan using your current lifestyle. Then adjust your plan to reflect the changes expected upon retirement. If you will be travelling more, estimate the cost and add it to your travel expense on your spending plan. Add health insurance costs that you now will be paying instead of your employer. You no longer need disability or life insurance so they can be eliminated. After taking into consideration all the expenses that will change with retirement, you will have a pretty accurate assessment of your retirement need. Don’t forget taxes.
Next, estimate your retirement income sources, such as pension, social security, and real estate cash flow. Subtracting this estimated retirement income from your estimated retirement expense will leave you with the amount of money you will need from your retirement savings each year. To be safe, figure on withdrawing a maximum of 4% a year from these accounts. That means your minimum retirement account balance will need to be at least 25 times this annual need.
I think you should have a bit more than that for a safety factor. Once 4% of your retirement savings exceeds your annual need, you should be able to FIRE with confidence.
If you could go back in time to your first day of med school and give yourself one piece of advice what would it be?
Once you get married, spending time with your family will be far more valuable than working another shift, or taking extra call, simply to earn more money to buy more stuff. You will have plenty of money if you pay attention to your spending and avoid debt. Spending time with your family will be far more valuable than money. Put your family on your schedule. Your kids would rather have more time with you than a bigger house, a nicer car or more toys. Make your family your highest priority.
I can’t thank Dr Fawcett enough for taking time to tell us about some of his successful ventures. He has definitely inspired me to branch out with my side hustles. To check out his blog, his books or learn more about his financial makeover coaching go to DrCorySFawcett.com.