The Road Less Traveled

This week I pose a challenge. Or at least a topic of self-reflection. Do what others don’t, won’t, and/or can’t.

Society creates a road map guiding our lives. From a young age, my parents encouraged college. I did well in school, so it was seemingly a natural path forward. Good job turned career, reasonable retirement, and a comfortable, yet modest lifestyle. This may or may not resemble your youthful experience.

The flaws of this thinking were pointed out to the masses by none other than the author of Rich Dad Poor Dad, Robert Kiyosaki (and Sharon Lechter). He was raised by educated parents who provided similar guidance -- work hard, go to school, and get a job. Save for retirement along the way to meet the coveted retirement milestone by the ripe age of 65.

I won't spoil the book, but Robert determines his poor dad lacks aspects of financial literacy. Doing well, yes, but leaving so much on the table.

His rich dad gives him a different mindset about life and money. His rich dad speaks about assets, debt, credit, and taxes. In the end, his rich dad deviated greatly from the societal norm and found tremendous results. Financial success far superior to that of his significantly more educated poor dad.

Now that's a tough concept to pitch to a bunch of CRNA's because the majority of us fall into the poor dad category – highly educated and working for earned income. This form of income is heavily taxed making it less efficient than other forms. I'm referring to W2 income, the most common type among CRNA's.

1099 contractors with an LLC are business owners. Maybe a mix of self-employed and business owner, but that’s for another time. Anyway, this income is taxed differently. More work on the bookkeeping side, but ultimately lower taxation.

It goes without saying, but taxation is likely the largest expense of any W2 CRNA.

Feel free to check our Kiyosaki’s book on the cashflow quadrant. It’s not in my must-read list because of overlapping concepts with Rich Dad Poor Dad. Short read and worth the time if you like reading.

Sure, there are aspects of being a 1099 contractor that are more costly such as malpractice, health insurance, or other benefits. But it's the almighty business expenses that make the difference.

It’s about minimizing taxable income via any number of business expenses. Or pushing taxes down the road with a solo 401(k) or health savings account (HSA). That takes advantage of inflation where $1 today is worth more than $1 tomorrow. Or next year. Or next decade.

Opportunity

Our healthy income, inefficiencies aside, affords ample opportunities for financial security, success, and generosity. It's what we do with our income that determines the degree we partake in the aforementioned.

The Challenge

So how does taking the road less traveled apply to your life and this personal finance blog? Let me give you a few ideas to mull over during your next long case.

I would argue the basics of financial literacy are overlooked. Kiyosaki speaks to great lengths about how personal finance is not taught in schools, nor the home. We spend a significant amount of our lives, if not the entirety, going through the motions.

Take a bit of time to educate yourself. I have done a great deal of self-study and compilated a few of the most dense works in the must-read list. I didn’t create such a list nor blog for my own entertainment. I read them and know what they say. I don’t learn a significant amount from writing these blogs.

As crazy as it sounds, all of this effort is for you, the reader. And those of you who reached out for financial coaching. I must admit, that has been pretty enjoyable.

Another Challenge

I challenge each of you to create dialogue about your finances. With your spouse or battle buddy. Make finances about self-improvement. Each of us are on a unique journey with different goals and a different timeline. There is no right nor wrong.

To do this, write down a couple of goals. Write down where your money resides. Draft a budget to outline your cost of living. Nothing crazy, just the basics. It’s easy to overspend when you don’t keep tabs on your dollars. And with your goals, remember one thing…

Unrealistic versus undesirable

As high-income earners, and yes, any full-time CRNA qualifies, most financial endeavors are possible. I'll be the first to say sustainability is important to long term success. I would however, recommend great intensity at the front end of one's financial journey.

It's crucial to find yourself on the beneficial side of compounding interest. This makes life easier and ironically, less expensive. It's the sprint that many call unrealistic, but I disagree -- I say undesirable.

I get it. Terminal degree. Many hours of studying, being broke, and living like a student. Now the income windfall has arrived. Rich at last!

Not to mention, most newly graduated CRNA's are in their 30s (give or take). That's a significant number of years living on less than those around you. Now it’s your time to show them up.

Everyone from high school has purchased a house, maybe their second by now. Definitely buying vehicles. Toys are not in short supply. $25,000 for that boat and another $20,000 for the camper. Maybe it's a toy hauler carrying a couple ATV's.

I get it... You feel behind. You spent time reading Miller instead of working a day job to meet the payments on your toys. If toys fulfill your life aspiration, then yeah, you are behind. Looking for financial security, success, and generosity? Then read on.

I'll bring transparency to the situation. The average American saves 5% of their income. And their income isn't nearly as substantial as the average gas passer. Their 5% is not the same as your 5%.

Reality (and statistics) say its paycheck to paycheck living situation for most. That's the norm – CRNAs included. No debate to be had.

Tides are shifting.

It’s no secret the Fed is increasing interest rates to curb inflation. They are making borrowing money more expensive, which leads to many things including higher costs of goods and services and higher unemployment.

Money is becoming expensive to borrow. Mortgages, student loans, and toys alike. It's notably heavy to be on the wrong side of compounding interest. So, if you wish to escape the chains of living life one pay period at a time, it's essential to buckle down.

What does that mean?

It means doing the undesirable. The unthinkable. The unfathomable. The things that make your peers think your marbles are absent.

It means paying off those GRAD Plus loans. I think some people buy houses with four or five bedrooms out of necessity. Their loans have been with them so long they have demanded their own bedrooms.

I'm not saying live off the absolute minimum. I just feel the critics, hands on the keyboard already typing their objections.

I'm saying, make a plan. An aggressive one. One that feels almost uncomfortable. Definitely undesirable. All in an effort to go against the norm. Be that weird young person who paid off their schooling in one to two years. Be that person who maxes out their retirement accounts each and every year without fault. Be that strange ranger who has money set aside for a rainy day.

Ratios

Personal finance at its most basic level is about money in vs money out. Income vs expenses. Boost income by taking a higher paying job or working more hours – both undesirable. Minimize expenses by spending less – undesirable.

We decided to do both. Compensation was a close second in our job search. No shame about it. Money is a fantastic, powerful tool. It provides many opportunities. It is one of the few things that can buy time, our most valuable limited resource.

I’m giving anesthesia for many reasons. I do it for the patients. I find it fulfilling and it provides me with purpose. But don’t think it isn’t also about the money.

Let’s just say the desirable jobs aren’t the ones meeting this criteria, so don’t find my income, not situation envious yet.

Bonus – If you have a surplus of income, you can invest those dollars to work for you. They will multiply if invested appropriately. Little workers building your nest egg while you sleep. We recently crossed into the territory where our equities and money market accounts are producing 4 figures of income monthly. It’s not enough to retire, but it’s something.

That doesn’t include the value of the stocks increasing, just the dividends from our investments. Pretty cool.

Decrease Expenses

Marie Kondo, a Japanese organizing consultant for cluttered dwellings, asks owners if a particular item sparks joy. This is one method she uses to determines an item’s viability in their space. This is also how Mrs. TFC and I manage our expenses.

A large house doesn’t bring joy. Neither do designer clothes. I’m not into new vehicles. We don’t do extravagant dinners, travel, or vacations. They just don’t possess value to us. We live in a small town where $5,500 per month does us just fine.

Mrs. TFC and I have so many funny stories about ways we cut costs, but still accomplish our mission. I’m a big thrift shop fan. So many items I would never pay full price for, but splurge on at the thrift shop. I have designer suits and suede shoes that I paid pennies on the dollar for. Kind of fun hunting for pearls.

We travel mindfully…

A few years ago, Mrs. TFC and I went to Hawaii to visit some friends for almost 3 weeks. The 4 of us spent time together in the evenings and on the weekends, but Mrs. TFC and I fended for ourselves during the week.

A bus pass was the way to go. Currently $30 for a week pass with unlimited rides, we went all over Oahu. We planed our day around which beach we wanted to snorkel at, but also how frequently the bus arrived. And when the last bus returned to the West side of the island for the night.

It was pretty fun actually. Riding the morning bus with a group of grade schoolers. Afternoon bus with the commuters. Stopping at Walmart for groceries and snacks knowing we only had 25 minutes between buses.

Renting a car would have been convenient, but extremely expensive not only the rental cost, but parking was at least $8 per hour if you could even find a spot. And rideshare services would have been even worse. The value wasn’t there.

Not desirable to stand at the bus stop and have the public transit dictate aspects of our day, but we were able to do everything we set out to do. And for a good price. Great value. I actually listened to the audiobook, “Rich Dad’s Cashflow Quadrant” by Robert Kiyosaki on the bus as we crossed Oahu.

Live Mindfully

Apply value to life and finances. Mrs. TFC's $2,500 Ford Focus allowed her to arrive at work at the exact same time as her $60,000 4Runner. Not a second saved, nor a sole impressed.

An expensive wardrobe won't lead to a better job, especially one where we wear boxy pajamas to work. A bigger house in most circumstances won't do anything the matchbox house wouldn't do. But family size? Here is one for ya’.

There is a family friend, ultra-high earner (probably multimillion dollar annual income), family of seven who lived in a Midwest 1,000 square foot 3 bed, 1 bath house. He is in his mid 40s and has been making good money for a few years now. They lived there for quite some time despite their financial success.

They saved up for 8 years planning and building their future home, which is a massive 10,000+ square foot house on many acres. 20-foot ceilings with an indoor basketball court, movie theater, golf simulator... you get it.

Humble family who paid for the multimillion-dollar house in cash. They lived like no one else and did the undesirable. Now they live like no one else. And each of their five children have their own suite because what else is there to do with like….12 bedrooms. I'm waiting for the helipad outback.

There isn’t a right or wrong way to live. And I don’t know anything about you. If you found your way to this blog, changes are you give anesthesia or provide some form of healthcare service. Both of which required you to take a path less traveled. Not many have a college degree, let alone an advanced practice or terminal degree.

That being said, why leave the road less traveled now? Why not stick it out a bit longer to achieve financial security and success? And most importantly generosity. I don’t have much to offer the CRNA community in terms of skills, research studies, or anecdotal findings. But I do know a couple things about personal finance, anecdotal or otherwise. They work for me.

So I challenge you, take the road less traveled. And if you find yourself at a fork in the road and want a second opinion. Don’t hesitate to reach out. As always, thanks for reading.