Docs Who Cut Back #12: Dr. McFrugal

Dr. McFrugal is an anesthesiologist and fellow physician finance blogger who has distinguished himself as my favorite purveyor of food porn - I've never seen a photo of one of his plant-based meals I didn't immediately want to put a fork in. He espouses minimalism, frugality, and the selective pursuit of luxury that provides his family pleasure out of proportion.

I had the privilege of meeting him in person at FinCon18, where he boldly brought a neonate to the conference. (Thanks to the 24 hour party run by the Waffles On Wednesday beneath a giant inflatable flamingo, Dr. McFrugal and his wife still managed to look better rested than most docs in attendance.)

Like the Loonie Doc before him, this interviewee is another example of someone who "cut back" to full time, in this reducing a 65 hour work week to the more sane 40 hours a week.

1. What is your specialty, and how many years of residency/fellowship did you complete?

I’m an anesthesiologist who also practices interventional pain management. I completed four years of residency in anesthesiology and an additional year of fellowship in pain management.

I’m 35 years old, and I just started cutting back in the Spring of 2018 after my first child was born, about four years after completing training.

I need to be up front about one thing though. My idea of cutting back is working 1 FTE (full time equivalent, which is essentially working a 40 hour work week). Currently, my hours are about 7 AM to 3 PM, Monday to Friday. I may pick up one or two weekend or night shifts a month, but not much more.

This is a significant decrease from about 65 hours a week, which is how much I was working four years ago. Hence, I have “cut back”.

2. What did your parents do for their livelihood?

My dad was a pharmacist and my mom was an accountant. Both retired about five years ago and are enjoying life. Currently, they spend a lot of their time traveling.  

I would characterize my upbringing as financially secure. Both of my parents were relatively frugal people. They were classic savers and not spenders. My sisters and I never really had to worry about money.  

More importantly, my parents always made time for us and were always there when we needed them. For example, if we needed help on our homework, my parents would be there to guide us. They were always there for our sporting events, concerts, recitals, graduations, and any ceremonial milestone events in our lives. No matter what, my sisters and I knew that we could count on them for love and support.

Through my parents, I came to understand that while money is valuable, quality time spent with loved ones is even more important. This is especially true if you have “enough” money. Because of this, my upbringing had a very positive effect on my money blueprint, and on life in general.

3. What motivated you to cut back?

Family is the biggest reason why I cut back. My parents were always available when I was a young child and I want to be the same kind of parent for my child(ren).

Cutting back allows me to help my wife raise our daughter. Being a parent can be tough, especially if you have to do it all by yourself. That’s a scenario I did not want my wife to be in. My goal is to be a present husband and father.  

Health was also a big motivator for me to cut back. It’s not like I was totally unhealthy while working 65 hours a week. But regularly working nights and long hours increases your stress load, which can take a toll on your health in the long run. It can also lead to burnout. I didn’t want to become burned out or develop an unhealthy lifestyle. Cutting back just made a lot of sense.

4. What were the financial implications of cutting back?

Interestingly, there were no financial implications from me cutting back. In reality, I’m probably making more money now working 40 hours a week compared to three years ago when I was working 65 hours a week. The only major implication is a huge gain in time.

Sounds strange, but it’s true. Allow me to explain.

But first, a bit of a backstory.

Throughout residency and fellowship I was used to working about 65 hours a week. Meanwhile, I was frugal enough to live on half of my resident’s salary, which is not easy to do in Los Angeles, a high cost of living area. After maxing out my retirement accounts, all of my extra cash went directly to paying off my student loans.

Once I found a job after fellowship, I was determined to earn enough money to pay off my student loans completely in two years. In addition to that, I was also able to earn enough for a down payment on a house. It wasn’t easy. I did it by continuing to live frugally and working many hours. During the first three years I worked about 60-65 hours a week, which is what I had been used to in residency. All of this happened during my first three years of working as an associate physician at a relatively lower pay rate.

Now that I am a partner physician, my pay rate has increased significantly. On top of that, there was a pay raise across the board for all physicians in our medical group. And finally, I just started earning an extra stipend for my sub-specialty in pain management. All this considered, that is why I am currently making more money now at 40 hours a week compared to four years ago when I was working 65 hours a week.   

We didn’t have to downsize our home or our lifestyle at all. In fact, in many ways it has become slightly inflated. We still live a relatively frugal lifestyle and manage to spend on select luxuries, such as travel.

5. How did colleagues react to your decision?

Actually, my decision was well-received. Many of my colleagues expected me to cut down my hours. They thought that working 60 hours a week (1.5 FTE) is not sustainable and would eventually lead to burn out. I certainly did not get any push back at all when I decided to cut back.

My medical group has hired a lot of new physicians lately. Many are under 40 years old like me. In general, the younger physicians value work-life balance a bit more compared to the more senior physicians. That said, all of my colleagues were very understanding. Those who appreciate a great work-life balance could relate because they have similar values. And those colleagues who want to work more saw my “cutting back” as an opportunity to pick up extra shifts and work even more.

5b. Was your family supportive or critical?

My wife was overwhelmingly supportive of me cutting back. She always wants to spend more time with me and she really appreciates having me home to help take care of the baby. She totally wouldn’t mind if I left work and stayed home with her all the time!

The baby isn’t able to verbally express her appreciation for me spending more time with her. But I’m sure (or at least hope) she’ll thank me later when she’s older.

6. What have been the main benefits of your decision to cut back?

I’ve realized many benefits by cutting back including:

• Spending more time with my wife and baby. This is time that I can never get back.
• Getting more quality sleep, which is vital to overall health and wellness.
• Having more time for hobbies such as reading, blogging, exercising, etc.

7. Main drawbacks?

I can’t think of any real drawbacks.

I guess if I had to pick one, it would be that I am giving up the opportunity to make even more money. But this isn’t a real drawback to me.

Once you have “enough” money, every subsequent dollar you earn becomes less valuable. Not only is every additional dollar that I earn taxed at a higher rate, those dollars become unnecessary after having enough money. Because of this, the opportunity cost of earning more money is not a real drawback.

8. Did you fear your procedural or clinical skills might decline?

Not at all. At 1 FTE, I’m still doing enough procedures and working to the point that I do not think my skills will decline.

In many ways, I think it may even help prevent the decline of my skills. This is because by cutting back (and not becoming burned out), I can better maintain my health and the mental acuity necessary to perform at a high level. In addition, cutting back will help me maintain my zeal and passion for medicine, which would likely translate into me being a better doctor.

9. If you are honest, how much of your identity resides in being a physician?

Being a physician is a big part of my identity. But it’s certainly not everything. More and more of my identity resides in being a husband and father, especially after cutting back. And I’m totally fine with that. My family is, and always will be, my top priority.

10. If you had not gone into medicine, what alternate career might you have pursued?

This is a tough one. If I had not gone into medicine, I probably would have pursued a career in pharmacy like my dad.

Another alternative career I might have pursued would be a travel advisor, agent, consultant, or anything related to travel.

11. What activities have begun to fill your time since you cut back?

Since cutting back, most of my free time has been spent helping my wife take care of the baby. Like I mentioned earlier, parenting can be tough. So I try to give my wife a much needed break from caring for our daughter. When I’m home, I play with the baby, read to her,  and change her diapers.

I have also had more time to exercise, stretch, and meditate.

12. If approaching retirement, what activities have you begun to prioritize outside of medicine so that you retire to something?

I’m definitely not approaching retirement yet since I plan to work another 20 years or so. While I’m forecasting that we could be financially independent in five years, I am not planning to retire early.

When I do approach retirement, I think it would be an easy transition. I imagine slow traveling with my wife throughout different parts of the world.  

13. Did you front-load your working and savings, or did you adopt a reduced clinical load early in your career?

As mentioned in a previous question, I absolutely front-loaded my working and savings very early in my career (as early as residency).

The biggest advantage of this route is that I paid off my student loans very early. Nowadays, the average medical student graduate has about $200,000 in student loan debt. Psychologically, that is very daunting.

In addition to paying off my loans, front-loading my working and savings allowed me to develop the discipline and habits for future financial success.

I wouldn’t do anything different if I were graduating residency today.  

A few observations about Dr. McFrugal that might be instructive for the rest of us:

1. He leveraged the benefit of a higher paying sub-specialty at the cost of an additional year of training. That extra year paid a nice dividend in increased salary, helping him to cut back without significant financial sacrifice. In many fields, sub-specialty training can offer either a higher income or an extended runway at the end of a career. I recall a conversation with a friend from residency who did a dual residency in EM/IM that cost him an extra year of training because he considered IM his exit strategy from possible burnout in EM.
   
2. Dr. McFrugal obliterated his educational loans as a first priority. He front-loaded his debt elimination to great effect, allowing subsequent years' earning to go completely toward wealth accumulation.
   
3. By continuing to work resident hours as a young attending, he leveraged his human capital (the gifts of youth and extraordinary stamina).
4. He timed his reduction to coincide with the birth of a child. Seldom does life conform to plans this neatly, but that's no excuse not to think ahead. When such plans do come to fruition - what an impact!
5. Selective luxury spending has allowed a high quality of life with overall low costs despite a high cost of living area.
6. For those so inclined, minimalism and frugality work in tandem to reduce expenses. The less you own, the less space you need , the lower the mortgage, the less space you have, the less you can own, and so on in a virtuous cycle.