Welcome back to another amazing Working Women Wednesday, where of course I have another great story to share with you. Today I’m talking with Miss. Bonnie MD, an academic dermatologist who works over in Long Island, right next door to me here in Connecticut.
I know I went through this before in my interview with Hatton1, but for those just tuning into this series, I wanted to put a reminder of the financial forces working against doctors:
- Giant student loans to pay back (averaging $166k in 2013, and surely higher now)
- Going to school for years and not earning anything. Remember, when many of us have already started our careers, they’re in school at least until age 26. Longer depending on the specialty
- Working in residency for years and earning almost nothing – most don’t start a career earning “real doctor” money until nearly 30. And in some specialties, it would be several years after 30 before they start pulling down the big bucks
- Lottery mindset. They suddenly come into a lot of money after finishing residency, and some of them act like they’ve won the lottery. Remember, these are 30- somethings who’ve never made a significant amount before. Lottery winners spend themselves into bankruptcy because they don’t know how to handle money, and they mistakenly think because they “have a lot” they can “have it all”
- Pressure to “keep up with the Joneses” – to show externally that they’re successful by picking up the big house, fancy cars, and expensive trips. After all, people might correlate an externally successful doctor with a good doctor, right?
- Bad investments. They’re frequently targeted by less-than-scrupulous salespeople (whole life, anyone?), and they’re the target of sub-par investment pitches. Unless they’ve already educated themselves on investing, they may fall for these pitches and lose money. At a minimum, they likely won’t make as much money as they otherwise could
I wanted to make sure to put that reminder here again, because often people mistakenly believe that doctors “have it easy” when it comes to finances and building wealth. They certainly have the income to become financially free, but not always the tools to make the right choices to do so.
So, without further ado, lets hear more from Miss Bonnie MD!
Tell us about yourself!
I’m a academic dermatologist and live in Brooklyn. My work is in Long Island. I am engaged and we are expecting our first child late this year. I also have a sweet bonus son who is 10 years old. We love to attend concerts, go out to eat (and cook) and travel.
Let’s get some details – how much money do you make, and how long did it take you to get there? And are you a millionaire or are you on the way?
My actual yearly salary varies (I am compensated a base salary + productivity). But right now it’s in the $300k range. Since I’m a dermatologist (and I had a few bumps on that road), it took me a total of 15 years to get here! (4 years college, 4 years medical school, 3 years research, 4 years of residency) and just over $200,000 in student loans. I am engaged but not married, but we have “merged” our money. Our combined net worth is close to half a million now. We expect to hit 1 million in retirement accounts by 2023. [ our current NW includes equity in a condo ]
How did you get started in the workforce?
As a physician, our path is laid out. After residency, one chooses what kind of practice they’d like to work in (and some never practice). I chose academics for a number of reasons – I love teaching residents and I also love seeing patients in the hospital. I run the consult service at my hospital and you can only really do that in academics.
4. How did you get from where you started to where you are now?
I went to medical school later than most – at age 27. I was pre-med in college (biochemistry major) but had a 4 year detour working at Morgan Stanley in their IT dept. I thought I’d just work 1 year or so but, well, they kept raising my salary and sent to me to places like London for 6 months and Brazil for 1 month. I made 6 figures when I was 23. I still wanted to become a doctor despite all this and applied in 2003. I was accepted to my first choice – Columbia.
Where do you want to go in your career – and your financial life?
I love being a dermatologist. I’m not pursuing FIRE per se, but financial freedom is very important to me so that I will have choices. The practice of medicine is changing rapidly and I want to be in a position to pick what works for me, not the other way around. I started medicine too late to really take advantage of “RE” but I’ll be in a position to go part time in about 10-15 years. I think it’s important to enjoy life NOW too. We are still paying down debt (mainly my student loans, his mortgage) and we budget to eat out and take a few big trips a year.
A. What’s the biggest challenge in being a breadwinning mom? What’s the best part?
Having a team approach to finances vs. whoever makes more controls the money and decisions is so important. You’ll never win that battle and only have a bruised partner and a botched relationship. We have made (and adjust) goals together and pool our combined resources. The best part? Having the ability to have more choices with our combined income. I suppose the main challenge is that I don’t have the freedom to work a lot less if I wanted to (at least in the near term). But, one of the beauties of being a dermatologist is that our hours are pretty good so I don’t feel overworked (for the most part).
6. B. What do you see as the key to earning such a high salary?
A bit hard to answer this since I’m a physician and pretty much all of us make well over 6 figures if we are working full time.
Have you ever experienced issues in the workforce because you’re a woman? What did you do in response?
Thankfully, I have not. But a related issue is maternity leave. As the primary breadwinner, I definitely need to plan for my leave as not all of it will be “paid leave.” We live below our means and have been saving for this so I’ll be able to take a full 3-4 months with minimal financial impact.
Chief Mom Officer is primarily a personal finance blog – tell us about your saving and investment strategy
We live below our means in a high cost of living area – NYC. We are in a fortunately situation of living in a condo that was bought in 2000 – so our housing costs are quite low for the area. Our goal is to save 20-30% + of our gross income to reach financial freedom or FI. Our overall goal is to have 5 million for FI, but we would be fine with less. Life is unpredictable so the more the better.
We are adequately insured – I have disability insurance and 2 million in term life insurance. He has life insurance. We have umbrella insurance in addition to auto and home insurance.
Currently, we max out all available tax-advantaged retirement accounts: my 403b + generous employer contribution, my 457, my (backdoor) Roth IRA, his Roth IRA, his 403b with his work, his solo-401k (he has some 1099 income as well) . At my current job I also have a small pension like plan fully funded by my employer. We will probably open a taxable account soon. I count this as separate from our investments but we also have 529 accounts for our bonus son and our future child. Right now, we only invest in index funds. Our asset allocation is roughly ⅓ large cap growth and value, ⅓ small cap growth and value, ⅙ REIT, and ⅙ international funds.
I first became interested in this stuff through some co-residents in my final year in residency. I was quite financially illiterate prior to that! They introduced me to the White Coat Investor book. The rest is history. I started my own blog recently due to a number of reasons, but I felt that female physicians needed their own voice and we have concerns unique to us since most of us won’t be stay-at-home wives.
What’s the top three pieces of advice you’d have for someone just starting out in the workforce, struggling with their career, or just looking to improve how they handle their money?
- Live within your means. When your income increases, don’t increase your lifestyle in proportion. You lived on lesser income before, you can still do it.
- Learn the basics of personal finance and read at least one financial book a year. No one will care more about your money than you.
- The more money you have saved and invested wisely, the more choices you will have in life now and later.
Where can people connect with you?
You can find me at http://missbonniemd.com, or on Twitter and Instagram @missbonniemd. I’ve also partnered up with Carrie Reynolds at hippocratic hustle – I will be co hosting a podcast on finances – the first one comes out this Monday 6/19. It’s geared towards female MDs but would be relevant to others as well. It’s at hippocratichustle.com and available on iTunes !
CMO Here Again
Thanks so much to Miss Bonnie for stopping by to share her story! I loved learning more about her, and thought her advice in Question 9 is very true – for any income level. It’s not about how much you make, it’s about how much you keep. Even if you’re a high income earner, it’s certainly possible to spend everything you make (plus some!) if you don’t watch your spending and live within your means.
Also, if you don’t teach yourself about money, personal finance, and investing, the world won’t just deliver that knowledge to your feet. You’re going to have to seek it out yourself – through blogs like this one (or others on my favorites page!), books, and podcasts. Otherwise you’ll be at the mercy of people who are more interested in how they can get their hands on your money, rather than on helping you become financially successful.
If you know anyone who would be a good candidate for this series (or if that might be you!), drop me a note at firstname.lastname@example.org – I’m looking for moms that are breadwinners, earn six figures, and/or are millionaires. I’d love to connect and share more amazing stories like this!
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