Physician on FIRE – Geographic Arbitrage, Sunk Costs, and Gangsta Rap

Mad Fientist: Hey! Welcome, everybody, to the Financial Independence Podcast, the podcast where I get inside the brains of some of the best and brightest in the personal finance space to find out how they achieved financial independence.

I know it’s been a while since I’ve released an episode. And I’m sorry for that. I’ve been traveling quite a bit for the last few months. But I’m back in Scotland now. And I have a lot of really exciting episodes planned for the rest of the year. So I’m excited to be back behind the mic. And I’m looking forward to sharing this episode with you today because it’s a special one.

You may remember in previous episodes, I’ve recorded podcasts live from FinCon, the financial blogger conference. And this year was no different.

So, I was just in Dallas for FinCon 2017. I had a great time. I got to record on the podcasting stage there. And if you recall from previous years, every time I’ve recorded live at FinCon, I’ve had Mr. & Mrs. 1500 from 1500Days.com joining me. In 2015, they interviewed me for episode #14. And in 2016, I interviewed them for episode #26.

For this year, I figured why not they join me as co-host and we can interview someone else.

So, that’s exactly what we did. And we had the pleasure of talking to the Physician on FIRE from PhysicianonFIRE.com. The one problem with the recording at FinCon is they only give you like 25 minutes. So we didn’t have a full episode like you’re used to, but we had a really fine chat.

So, this is a nice introduction to the Physician on FIRE. And hopefully, I can get him back one day to do a full episode, so we can really dive deep into his story and what he’s learned on his path of financial independence.

But this is a really fun episode. There’s lots of craziness. Any time you hang out with the 1500’s, there’s going to be some surprises. And this was definitely no different.

I hope you enjoy it. Thanks again to Mr. & Mrs.1500 for co-hosting. Thanks to the Physician on FIRE for joining me for what was a very unorthodox episode. And thank you guys for listening. I’m excited to be back. I look forward to putting out more episodes soon.

But now, here’s the live episode from FinCon ’17. I hope you enjoy it.

Mad Fientist: Hey! Welcome to the Financial Independence Podcast. This is a very special episode today. We are recording live in Dallas from FinCon. We are staring at a VW Bug that has been converted into a podcast boost which I put a picture up in the shownotes.

And Mindy, you’re showing me something?

Mrs. 1500: Special thanks to the FinCon Podcast Network for sponsoring our live podcast recording at FinCon 2017.

Mad Fientist: Wow! You are perfect. That sounded great. Thanks! That was a little sneak-peek-a-hoo we have here.

So, in the past three years, I’ve done a live podcast from FinCon. The first year, the 1500’s from 1500Days.com interviewed me. And then, I interviewed them. And I thought, “I can’t do a live podcast without them.” So this year, they’re co-hosting. So say hello!

Mrs. 1500: Hello! Thanks for having me.

Mr. 1500: Yeah, thanks for having us again. It’s a pleasure.

Mad Fientist: And today, they’re going to help me interview none other than the Physician on FIRE.

Physician on FIRE: Hi! Thanks for having me. It’s great to see you guys again.

Mrs. 1500: Welcome to our podcast!

Physician on FIRE: Yeah! Happy to be here.

Mr. 1500: I’m honored. My wife and I had the honor of visiting the Physician on FIRE at his house. And the thing about him is he wrote a post a while ago about how he’s just a normal, average guy. And that’s completely true. If you meet this guy, and you go to his house, he could be your doctor, but he could be your garbage man too. You just don’t know.

And I thought about that with the Happy Philosopher interview that you did I think a couple of podcasts ago. Mad Fientist said, “What’s the deal? How do you separate your identity?” What Jeff, the Happy Philosopher, said was “Doctors, their whole identity is tied up. Your whole life is being a doctor.” But you, it’s not like that at all. You’re just a normal, average guy who happens to go and stick needles in people through your job maybe.

I saw your house. It was a modest house. But do you have like a secret doctor bat cave with a Mercedes for every day of the week that you are hiding from us?

Mrs. 1500: No, I’m jumping in here. He doesn’t have a modest house. He doesn’t have a doctor house. But he has a beautiful house. He has spent a lot of time furnishing this amazing house. You walk into this house, and it looks like he hired somebody. But he did it all himself. It’s beautiful! You should post pictures of your house.

Physician on FIRE: Thank you, Mindy. I think I might have one in a post somewhere. I have to find it. It might be in my 50 Ways I’d Like to Enjoy a Retirement. Like you said, I did actually go out and find some mid-century modern furniture and re-finished it myself.

There’s one shot of our living room. So if you dig in there, you’ll find it. But thank you for the compliment.

Mrs. 1500: It’s a beautiful house. I’m really jealous.

Mr. 1500: We really do like it.

Mrs. 1500: My house is like mid-century kids trashed the furniture.

Physician on FIRE: Yeah, yeah.

Mrs. 1500: So, okay. I’m sorry. Back to Carl’s question. How do you separate yourself?

Physician on FIRE: How do I separate myself from my job? I’ve always viewed it as a great job. Many physicians do feel that it’s a calling and maybe had a little bit of a higher esteem. But to me, it’s been a great way to make a living. But when I leave the house, when I take up the scrubs, I’m just your, like you say, ordinary, average guy—or at least I try to be.

Mrs. 1500: A great way to make a living. Ten dollars an hour, right?

Physician on FIRE: Yeah! Sometimes, $12 if you work overtime.

Mr. 1500: So, my next question is how do you reconcile your sunk cost. You’re a physician, you went to school. And then you went to more school. And then, you probably went to more school after that. Then you did a residency. You’ve got a whole lot of time.

And I know you’re a smart dude, so you got some scholarships. But how do you reconcile all that work and time with early retirement. And I should mention, you just went part-time this month, is that correct?

Physician on FIRE: I did, yeah. It’s been great. I haven’t quite had the time to really feel the relaxation from working less because I’ve been to two conferences here in one week. I just went to the biggest anesthesia conference in the world. And I’m at the biggest personal finance blogging conference in the world.

But back to your question, I like to look at life going forward, decide what’s best from this point on. And looking back, it doesn’t really help. It doesn’t really make a difference.

There’s something in psychology called the sunk cost fallacy where you’re thinking about what you’ve already done and using that to decide how to live the rest of your life or the rest of your day. It doesn’t really help.

So, I just look at what I want to do next week, next month and next year, and figure it out from there.

Mad Fientist: That’s a fantastic way to approach it.

So, for some of the people in the audience who may not be aware of Physician on FIRE, maybe just give a little bit of a background, your story, and why you decided to pursue financial independence.

Physician on FIRE: Sure! So, like Mindy mentioned, I do stick needles into people. I do that as an anesthesiology to also help get them through surgery safely. And I’ve been an anesthesiologist now for 11+ years. And for a few weeks, I’m now a part-time anesthesiologist which is a good way to be.

How I became a blogger? Like 88% of your guests, they say they read something about Mr. Money Mustache.

Mrs. 1500: Who’s that?

Physician on FIRE: He’s your neighbor.

Mrs. 1500: Hush!

Physician on FIRE: Oh, never mind. I read him, found him, through just a news article in Market Watch. I came back to it when I was just studying for a board exam. That was just a real pain. It wasn’t any fun. I was spending all these time studying. I thought, “Gosh! I’m going to have to do this again in 10 years, aren’t I?” Then I thought, “Wait! I read about that guy, Pete. Now, what’s his name?”

I found his blog. I started thinking a little bit differently about the next 10 years. And then, I found the White Coat Investor who’s now a partner of mine in my site. We collaborate. But he’s got a great site that teaches physicians about personal finance topics. And I guess I tried to take some of the best elements of those two personas and those two sites. And I launched my own blog.

Mad Fientist: Nice!

Physician on FIRE: That’s about a year and nine months ago.

Mad Fientist: Nice. And so, you’re cutting back to part-time. What do you think your post-FI life is going to look like when it settles down with all these conferences?

Physician on FIRE: Well, we’ve got some pretty great plans. Like I said, we look at what we want to do going forward. And one of those things is to travel more and not just take vacation where you’re just seeing three sites a day and exhausted when you get home.

So, in November coming up, we’re taking three weeks and doing a Spanish immersion experience as a family. We’re going to attend a local school in a Spanish-speaking country and just try to live like the locals (or maybe a little better than the local). And we’ll plan a few trips like that.

I was talking with Mrs. Waffles on Wednesday who I see just 8 ft. away from us. She did a mission trip in Peru last year and just thought it was a remarkable experience. And if I can find a similar mission type trip, I’ll take the family so my kids can see what it’s like to live in a third world country, maybe help some people, play with kids in an orphanage, whatever it is that they might do during the day. That’ll be awesome. So I’m looking for something like that too.

Mad Fientist: Very cool! And I apologize to the audience for rushing through this. We have a 25-minute time constraint.

Physician on FIRE: Yeah.

Mad Fientist: So, we’re going to try to pack a lot in, but I could always get him back on later to do a proper episode.

But one of the key points to your story that I wanted to touch on was your geographic arbitrage that you did throughout your career because it’s unique in a couple of ways: 1) it was all within the US and 2) it actually was more pay than you would’ve gotten had you lived somewhere more expensive.

So, please just talk a little bit about that.

Physician on FIRE: Right! Well, first, you have to question your motive because I used to rank number one in Google for geographic arbitrage. But now, you rank number one. And now you’re bringing it up again. And on your site, it’s going to be in the shownotes.

Mrs. 1500: Ooh, nice play, Mad Fi.

Physician on FIRE: So I’ll have to republish my post and maybe try to sneak up at the top.

But no… in medicine, it’s rather unique in that there are jobs in rural America, in smaller cities, in middle America that pay better than cities on the coast that might be seen as more desirable. And so, those places also that have the higher pay tend to have lower cost of living. And that’s a double win if you’re someone that isn’t interested in living in San Francisco, New York, LA, et cetera.

And we both grew up, my wife and I, in small towns in the upper Midwest. And that’s where we are now. And it’s worked out really well help me become financially independent within 10 years.

Mad Fientist: It’s amazing! And it helps not being in one of those big cities too for the lifestyle inflation that maybe plague some of your colleagues.

Physician on FIRE: Right! I hear like the parking lots at the Medical Center in UCLA are going to have a whole lot of different cars than we do in Minnesota—a lot of trucks and Fords, Chevys, Hondas, et cetera.

Mad Fientist: Nice!

Physician on FIRE: Fewer Joneses to keep up with.

Mr. 1500: Okay! I’ve got a professional question for you at this time. Well, let me back up a second. I was a computer programmer. And I spent $3800 on my education. I found that hard to get over. So I can’t imagine what you’re going through with the sunk cost. But that was not my question.

My question was, sometimes, when I was at work, I would leave and I’d take my computer home, and I’d do some of my own work with my work computer. It wasn’t probably ethical. It’s probably against my contract. But I did it anyway.

As an anesthesiologist, do you ever bring nitrous home and…?

Mrs. 1500: You can’t ask him that! Shut up! Not on the…

Mr. 1500: Ladies and gentleman, that was a joke. The Physician on FIRE holds himself to the highest ethical standards.

Mrs. 1500: When we were at his house earlier this summer, I asked him the same question like, “Can you prescribe me drugs?” I’m not looking for them. It was just like a question like, “Can you do it? Can you prescribe your wife drugs? Can you…?” He’s like, “Technically, you can. But that’s not a thing. It’s way better to not.”

Physician on FIRE: It’s ill-advised. And yeah, you have to keep actual progress notes, like a medical record of some kind to back up that prescription. And of course, there are certain kinds of prescriptions, kinds that you’re probably looking for even though you said you weren’t that would never risk for friends and family.

Mrs. 1500: I think he did say one time he prescribed an antibiotic for his kid over Christmas or something, but maybe not even that…?

Physician on FIRE: No, I haven’t even done that. We go to the doctor, the real doctors.

Mrs. 1500: You go straight to the doctors.

Physician on FIRE: I’m an anesthesiologist.

Mrs. 1500: I mean, with all the i’s you need to dot and t’s you have to cross, it just doesn’t seem worth it.

Physician on FIRE: I’d be very careful.

Mrs. 1500: It’s so easy, but so much hassle.

Mad Fientist: Maybe you’re trying to force his hand at early retirement by getting him to…

Mr. 1500: Yeah, that would take care of that in a hurry once the license is gone. Well, I’m just thinking about how bad you would feel if you maybe don’t do a complete exam and then maybe you get a bad diagnosis, a wrong diagnosis, for a friend or your own son…

Mrs. 1500: Can you refill my Oxy prescription? I’m just kidding! I’m not even on Oxy.

Physician on FIRE: Do you have those bigger pockets full of cash? No, that was all a joke.

Mrs. 1500: Okay, we should get back to the real topics.

Mad Fientist: Yeah, we’ll bring it back around again.

Mr. 1500: I’m sorry. This’ll be my last podcast with the Mad Fientist.

Mad Fientist: No, no. This is perfect.

Mrs. 1500: This will be your last podcast ever.

Mad Fientist: So they say you’re a very normal guy. Was that always the case as a doctor? Or once you found FI, did you change and then became less on that normal doctor path?

Physician on FIRE: Right! I think I’m starting to find normal—probably abnormal for a physician, and maybe more normal for the average person.

But I didn’t really change much. When I found FI, when I discovered what it was, what it meant, I realized I had it. And so that made it pretty easy. It was kind of an amazing discovery because I hadn’t really thought about the concept of not working—at least until my kids were up and out of the house. Our boys and 7 and 9 years old right now. When I discovered this, they were not even kindergarten and preschool age.

Mad Fientist: So, I know Mr. 1500 has some closing questions. So I’m going to hit up my own pre-closing questions that I always like to ask people just so we get to it eventually because who knows what Mr. 1500 has in store for us. I don’t know personally, so I’m excited to see.

But if you have to give a piece of advice to somebody, what’s the one piece of advice would you give to somebody on the journey to financial independence?

Physician on FIRE: I would listen to the Mad Fientist.

Mad Fientist: Nice!

Physician on FIRE: I would read my article on geographic arbitrage…

Mad Fientist: …while I’ll link to in the shownotes. I’ll give you some of that good follow.

Physician on FIRE: Alright! And just try to minimize how much money flows out from your investments. So minimize your fees, minimize taxes in the tax records. Most physicians, that’s a really big deal.

Mad Fientist: There was also one thing I wanted to cover—unless you want to jump in? No, you’re good? Yeah. So if people want to get in touch with you, learn more, what’s the best way to reach you?

Physician on FIRE: Come to my site, PhysicianonFIRE.com. I’m on Twitter, @physicianonfire.

Mad Fientist: Nice! And also, you donate profits that you make from the blog to charity?

Physician on FIRE: Right! So I have started to realize a little bit of money from people coming to visit the site. And I donate half the profits to charity, mostly through our donor-adviced fund. And it’s easy to do because, like I said, when I came to start this blog, I was already financially independent. So it’s kind of all gravy to help some local and national charities. And it’s a wonderful thing to do.

Mad Fientist: That’s fantastic! So, Mr. 1500, I see you chomping at the bit over there for either a question. We got these thoughts in time. I just wanted to get those out of the way and I can…

Physician on FIRE: The anticipation is palpable.

Mr. 1500: Oh, no, I think we’re good. I’d like to let the audience know that I haven’t even been drinking it.

Mad Fientist: I was promised beer, by the way.

Physician on FIRE: I know!

Mrs. 1500: Not today. Well, technically, you were drinking today.

Mr. 1500: Yeah. Technically, yeah. It was a late night last night. So if my voice is a bit off…

Mad Fientist: So, I just wanted to thank these guys for co-hosting with me because it was the most ridiculous late night. I haven’t had that much good beer. That was something that Carl put together. He put together an amazing beer-tasting event where everyone brought great beers from where they live, and we had them last night.

And it has been an awful morning. I promised everyone beer here, but I couldn’t even think about bringing it down because I think if any of you had opened it, and I smelled it, I would have to end this very early.

Mr. 1500: And I left at midnight because nothing good ever happens after midnight. But it was a great time!

Mrs. 1500: I want to shout out to Wiley Roots Brewing in Greeley, Colorado for giving me some really great beer to share with you.

Mad Fientist: Oh, it was amazing!

Mrs. 1500: That was difficult this morning, but it was so good last night.

Mad Fientist: It was fantastic!

Mrs. 1500: Speaking of pint glasses that you drink beer out of, how was that for a smooth segway?

Mr. 1500: So, I saw your Twitter feed […] Most anesthesiologists, I wouldn’t think would be big fans of gangster rap. Are you a gangster rap aficionado? Were you ever a rapper?

Physician on FIRE: Well, I’m more a fan of his message, it’s very similar to mine—how you live in biggie smalls and mansions and benzes. That’s kind of what I try to tell people to do.

Mrs. 1500: The notorious PoF.

Physician on FIRE: That’s right.

Mad Fientist: That’s awesome! So you are an early ‘90s gangster rap fan?

Physician on FIRE: It’s kind of what I grew up with. I like a whole lot of different stuff, not country. But yes, I do. I do enjoy it.

Mad Fientist: That is a secret that I am not sure—like my entire college career was spent learning Bone Thugs & Harmony lyrics so that I could rap them perfectly. So that is amazing. That’s great to know about you. And we’ll make the next two nights of parties even more fun if we had a rap battle.

Physician on FIRE: Absolutely! Yeah, yeah […]

♪ Baby, I got yo’ money. ♪

Mr. 1500: May I ask you what kind of car you have?

Physician on FIRE: Yes, I drive a Chevy HHR.

Mr. 1500: Yeah! That thing with bulletproof windows, armored doors or…?

Physician on FIRE: Sixteen switches.

Mr. 1500: So, there’s some action up there in Minnesota.

Mad Fientist: Right!

Mr. 1500: Well, we have a special way to close. And actually, Notorious B.I.G., even though he’s dead, is going to make a reappearance as Notorious P.O.F. So here we go! Brace yourselves, audience. Oh, yeah, I’m sorry. We have to get the lyrics. It’s not like we just planned this five minutes ago or anything like that.

Mrs. 1500: I did not spend the early ‘90s learning Biggie lyrics.

Physician on FIRE: Meaning you did not memorize?

Mrs. 1500: I did not.

Mr. 1500: But Mrs. 1500 was actually a rapper. Not many people know this. Here she comes out of her rapping career.
♪ [rapping]♪

Mrs. 1500: Physician on FIRE, can’t you see all the other doctors drive Mercedes? And you don’t even fly first-class. I bet you even take up your own trash.

Physician on FIRE: Yup!

Mrs. 1500: Physician on FIRE, can’t you see…?

Physician on FIRE: Uh-huh…?

Mrs. 1500: Sometimes, your nitrous just puts me to sleep. And I just love your frugal ways. Everyone broke while you get paid.

Mad Fientist: That was awesome.

Mr. 1500: Thank you.

Mad Fientist: That was amazing!

Mrs. 1500: I just won the rap battle.

Physician on FIRE: You did! I did a little improv, “Uh-huh… uh-huh…”

Mad Fientist:That was a fantastic ending! So thank you to the 1500’s for being with me here onstage again. It’s been a fun tradition that I hope we’ll continue. We’ll have to figure out some other way to do it next year.

Mr. 1500: Thank you so much for having us.

Physician on FIRE: Yeah, thank you for inviting me.

Mad Fientist: And Physician on FIRE, yeah, thank you so much for being here. It was a pleasure. And hopefully, I’ll chat to you more at another stage when we actually have more time.

Physician on FIRE: We can do that. I would love that.

Mad Fientist: Awesome! Thanks, guys. Bye.

Mrs. 1500: Thank you.

Mr. 1500: Thank you.

Physician on FIRE: Thank you.