Bonnie Koo, MD on taking control of your finances and pursuing financial independence [PODCAST]

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“While much of the conversation around financial independence is tied to the ability to retire early, the real prize is flexibility.

I hear a lot of ‘I love what I do and will work until I die’ amongst physicians. Not so fast. Your goals and priorities will likely change as you get older. And sometimes, you don’t have a choice. A close family member needs extra care or passes away. Your child has special needs or other needs that require your time and attention. You never know what life may bring.

Working toward financial independence as a woman physician allows you to create your dream job. You have the ability to scale back your hours, take a leave of absence, or make other arrangements to optimize your day and your life. In short, you have a fall-back when life throws you curveballs.

By taking control of their finances and pursuing financial independence, women physicians are able to be better physicians, better mothers, and better partners. Being debt free, spending mindfully, and employing other strategies to reach financial freedom gives the woman physician choices and flexibility to live on her terms.”

Bonnie Koo is a dermatologist and founder and editor, Wealthy Mom MD.

She shares her story and discusses her KevinMD article, “Why women physicians should take control of their finances.”

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Today on the show we have Bonnie Koo. She is a dermatologist, and she is the founder of Wealthy Mom MD. She wrote the KevinMD article “Why women physicians should take control of their finances.” Bonnie, welcome to the show.

Bonnie Koo: Thank you so much for having me. I’m super excited to finally meet you.

Kevin Pho: We’ll get into the article a little bit, but first off, can you share your story and journey to where you are today?

Bonnie Koo: Yeah, I guess I’ll tell you the short version. As you know, I’m a board-certified dermatologist, and people always ask, “Well, how did you get into money?” because some people find out that I used to work at Morgan Stanley before medical school. But that’s not where I learned money. I was actually a technology person there and didn’t know anything about money.

Basically, when I finished residency, Kevin, I got a new job and suddenly was making a lot more money, and I knew that I didn’t really understand what was going on in terms of benefits and retirement accounts. So I finally decided to learn about it for myself. Then, as I started speaking to other colleagues, it was something that many people just didn’t know anything about, and so that’s kind of what piqued my interest. Then I just started helping people, and then I started a blog. Now it’s a podcast, and now I have a book. So I guess the rest is history, right?

Kevin Pho: So tell me about that transition from being a dermatologist into, would you call yourself, a money coach?

Bonnie Koo: Yeah, money coach, perfect. So it wasn’t something on purpose. Basically, I was spending a lot of time helping other physicians with money questions, and I was starting to make money as a money coach, but I never had this plan like, “I’m going to quit dermatology,” or quit medicine. But the pandemic kind of changed things for a lot of us, as you know. I actually had switched from full-time dermatology to locums work, and my last locums gig was actually in Hawaii for three months. It ended the last week of February 2020, and we know what happened a few weeks after that, right? That’s when the global pandemic was declared.

And so I actually couldn’t get a job, Kevin. The plan was to move back to New Jersey, where I am now, find something local, part-time, two or three days a week, and continue working in my business. But I couldn’t get a job, and so I said, “OK, I’ll just work on my business.” Obviously, jobs came back, or dermatology offices started opening up again, and I didn’t, and this was pre-vaccine. Honestly, Kevin, I was like, “I don’t need to see patients for money right now, and if I don’t need to expose myself,” I just thought, “Nah.” That’s basically what happened.

Now I’m fully vaccinated and all that good stuff, and I thought about whether I’ll go back or not, and I haven’t made a final decision. But I think what’s great about medicine, Kevin, is we have so many opportunities and different ways to practice. We don’t have to practice traditionally if we don’t want to.

Kevin Pho: How hard was it for you to leave clinical medicine?

Bonnie Koo: You know, I get this question asked a lot, because I talked to a lot of physician entrepreneurs who are looking to make veterans, and they always ask me that question. I find that many physicians have a hard time with that. I personally didn’t, but I also just felt like, well, I couldn’t work anyway because of the pandemic, and so in some ways I felt like the decision was made for me. But then, when it opened up again, I didn’t really miss it, so to speak, so I never felt guilty or bad about it.

Maybe at times I feel, and it’s not even so much guilt, Kevin, it’s more like I know I have a very specific skill set that’s very valuable, being able to detect skin cancer. I was primarily a medical dermatologist. But like I said, there are so many ways to practice medicine. I can go back and do volunteer work for residency programs. I can do locums to keep up my skill set, because I think at least once a year I might do something like that, just to make sure I don’t forget, right?

Kevin Pho: All right, let’s transition into the KevinMD article that you wrote. It’s titled “Why women physicians should take control of their finances.” Now, for those who didn’t get a chance to read your article, can you just walk my audience through it and share the story of why you decided to write it?

Bonnie Koo: Yeah, so obviously I’m very passionate about financial education, specifically for women. I think women physicians obviously make a lot of money. We tend to be the breadwinners of our families, and women in general tend to end up being the person who takes care of their aging parents. Now, this can be depending on your culture and things like that, and so there are many good reasons to understand money, because we’re often going to be the ones in charge of it. And it’s funny: In terms of statistics, in heterosexual couples the man usually takes care of the money, but among female physicians I find that it tends to actually be the woman who takes care of it, because the women tend to be breadwinners.

And so I think it’s just really important to understand where money is going, because I think all doctors, and I’m sure you hear this over and over again, want to have choices. People throw around the word financial freedom, but I think we just want choices. We don’t want someone to tell us how to practice medicine. We want to be able to practice medicine the way we want to, and when you do have financial freedom, you can create those choices for yourself. So I just think it’s also a form of empowerment, right? The more you have control over your money, the more empowered you’re going to feel about all the choices you have in life, whether it’s how you practice medicine, how you have time for your family, and all the other hobbies, right? Because doctors are human beings too.

Kevin Pho: So we talk a lot about physician finances on this podcast and on my blog, and there’s a stereotype that physicians in general are just not very attuned when it comes to finances and what to do with their money. Now, from your experience as a physician coach in this area, what’s your comment on that?

Bonnie Koo: Well, I don’t think it’s a physician issue. I think it’s a human issue, because we just don’t talk about money in general. But I think what’s specific about physicians and any other high-income earners is that we know we make more money than the general population, but that doesn’t mean we know money. I think people think, “Oh, if you make a lot of money, you must understand money,” but they’re not related. And I think physicians, because we’re sort of used to knowing everything, at least as a physician, I think some of us don’t like saying that we don’t know money, or any other topic that we’re not an expert in, so to speak. So I think some of it’s hubris, not wanting to see that they don’t understand money.

And because we do make a good income, and pre-pandemic, anyway, it was relatively stable, right? You work, you get a paycheck, and so in some ways there isn’t really urgency to learn money, right? Because the money’s always coming in. I think the pandemic changed that for many physicians, who are like, “Oh, maybe I should figure out this money thing, because maybe this paycheck isn’t as stable as I thought it was.”

Kevin Pho: So go into more detail about how the pandemic has affected physician finances. Can you share a story, perhaps either hypothetical or from your coaching practice, about how the pandemic has affected some physician finances?

Bonnie Koo: Yeah, I mean, I think it’s obviously multifactorial, but a lot of physicians, I think, started to just really think about and reprioritize what’s important to them. With the pandemic, obviously, all of us know we’re going to die at some point, but I think the pandemic is really just one of those time points in life where you’re faced with your mortality, and patients’ mortality. So I think it’s just rethinking priorities. And then, in that rethinking of priorities, I think they think, “Well, maybe I don’t want to work so much,” because we’re notorious for overworking, no matter what specialty you’re in. But then if you want to cut back, you have to have the finances to accommodate that.

Or many physicians are also like, “Oh, my income, my job, isn’t as stable as I thought it was, and this is my only source of income. Maybe I should do something about that.” And I think a lot of doctors have heard over time, “You should invest,” or, “You should have other sources of income,” but that’s not something that, well, I didn’t grow up with it. I think most people are just told, “Go to school, go to work, get a job,” right? And the income will take care of you, as if that’s the only way you should make money. So I think it’s also really encouraged physicians to sort of pursue other ways to make money besides their clinical paycheck.

Kevin Pho: So what are some specific ways that you see physicians doing that, not being dependent on a single source of income? What are some examples that you see?

Bonnie Koo: Yeah, I mean, I think the obvious one that most doctors do already is through their retirement accounts, except that’s kind of delayed. You can’t use it easily before the age of 59, although there are ways to get around that. I think real estate is what most physicians end up doing, whether it’s passive or active, because we do have the income. We have the credit to take out loans to buy rental properties, whether that’s long term or short term, or syndication, which is a passive way. So I find most of my clients will do that.

Usually what I ask my clients is, “OK, what’s the third stream of income you’re working on?” Because number one is their physician income, and number two is usually their retirement accounts that they’ve been paying into. And so the question is not what’s your first; it’s moving to a third. For most people, real estate is a natural thing.

A lot of physicians also start businesses. That includes starting their own practice. That includes just other ways of using their medical degree, right? Because seeing patients is just one way to use the expertise in our brains: consulting, pharmacy, moving to pharma, inventions. Right, like I know physicians who’ve been inventing, who have created inventions. And so I think it’s just kind of giving them permission that they can do other things and that maybe they are creative, because a lot of physicians, I think, tell me, including myself when I first started this, “Well, I’m not creative. I’m not one of those people. I’m not an entrepreneur.” That’s just truly a limiting belief.

As I work with my clients when I had a one-on-one practice, I think everyone has dreams that they’ve kind of forgotten about. You get into the grind of medicine. So I think the pandemic has been a great way for people to pause and sort of figure out what they want to do with themselves.

Kevin Pho: Now, what kind of resources can you recommend? Because a lot of physicians pretty much just do medicine for decades and decades, and that’s really all they know. Now, like you said, a lot of physicians want to branch outside of clinical medicine, but they just don’t know what else to do or where to go. What kind of resources do you recommend for that?

Bonnie Koo: Yeah, I mean, that goes from free to paid resources, but the good news is, because of social media and Facebook groups, there are Facebook groups where there are physicians who are thinking outside the box, non-clinical. There’s a group on non-clinical careers. There’s actually a paid membership that I’m in that’s for physician entrepreneurs, but new ones, or just people thinking about it. So I think it’s important to surround yourself with other people who are thinking like you, because, like I said, as physicians, depending on where you work, you might not have access to physicians who are doing other things. Although, once you start looking, you might find that you actually have a lot more, maybe in your network, that you didn’t know. And so I think it’s just starting to ask, and attending physician conferences. I think the networking is really important.

In terms of other resources, there are physicians who offer courses on how to invest in real estate. I have a money coaching program for female physicians that’s basic financial literacy plus mindset coaching. I recently wrote a book, although it’s not coming out until early 2022. And so the resources are there. I think 10 years ago they were very few and far between, but now I feel like there’s an explosion of resources for doctors. I think it’s just, what’s that saying? “When the student is ready, the teacher appears.” So I think it’s just being ready and being like, “Hey, I want to see what else is out there.” Then you just start looking, and I think there are so many resources that it could even be overwhelming for a person.

Kevin Pho: So in our world, we know a lot of physicians, of course, who do these side gigs or do stuff outside of clinical medicine. But I talk to a lot of doctors about this, and there’s a spoken, or even sometimes explicit, guilt that if they’re not seeing patients in the exam room, or if they’re not in the hospital 100 percent of the time, they’re not real doctors. And that really gives them that hesitancy to step a little bit outside of clinical medicine. How do you advise physicians in responding to that?

Bonnie Koo: Yeah, so this is actually something I coach my clients on a lot. We get really specific about what they mean by guilty: Where is that coming from? And also their definition. You said one just now, that after not seeing patients full time, they’re not a real doctor. So I think it’s just kind of redefining what that means. And you know what’s interesting, Kevin, is that now that I’ve been sort of in the entrepreneurial world for some time, it’s very common for, I want to say, non-doctors or non-professionals to kind of change professions a lot, or just reinvent themselves, or sort of evolve, right? So I think it’s just sort of breaking down their definition of what a real doctor looks like. And kind of like I said earlier, Kevin, there are just so many ways to be a doctor, and doctoring part-time, or less than full-time, doesn’t mean you’re not a real doctor.

Like, I haven’t seen a patient in person in over a year, but I will always be a physician. There’s no doubt in my mind. Yeah, my medical knowledge might decrease over time if I stop seeing rashes, right? But my friends still message me pics, all their pictures. So I just think it’s sort of redefining for themselves what a real doctor means and kind of having them come to terms with that, because the thing is, at the end of the day, Kevin, they’re the ones who’ve made up the rules about what a real doctor is. It’s not like, well, some people might say, “Oh, you’re not a real doctor,” but they’re more worried about the sort of internal dialogue they have, about what they’re telling themselves.

Kevin Pho: We’re talking to Bonnie Koo. She is a dermatologist, and she’s the founder of Wealthy Mom MD. She wrote the KevinMD article “Why women physicians should take control of their finances.” Bonnie, in your coaching practice, what would you say are some of the biggest red flags that you see physicians making with their money?

Bonnie Koo: Biggest red flags. Well, I think the number one thing is their relationship to debt. I see a lot of physicians, and I’m sort of going against widespread mainstream opinion, in a huge rush to pay off their student loans as soon as they finish residency. I’m not saying you shouldn’t pay them off quickly. I mean, I think you should pay them off at some point. But basically, we get this message from society that debt is bad and should be avoided at all costs, and because it’s bad, we should get rid of as much as possible. And so I see these attendings shovel gobs of money towards debt, and we’re able to do that because of our income, and there’s nothing wrong with that, Kevin.

But I just want people to understand: What if they shoveled that money towards buying and growing assets, creating wealth? If you do that in five years, because kind of the advice that’s going around is, “Pay off your loans in five years, and you’ll be in a good place,” and that is true. It’s not that you’re not going to be in a good place, but wouldn’t you rather have an additional stream of income in five years that could partially replace your clinical income? I think that’s a better place, and that additional stream of income could then pay off your debt, versus using your active income.

And so that’s actually probably the biggest thing, one of the biggest things that my clients struggle with, because we’ve all associated debt with badness. If they have any amount of it, whether it’s student loans or even consumer loans, and a lot of doctors go into credit card debt during training, especially if they had a family and had to hire a nanny, they have so much anxiety because of it. And so it’s unpacking that. Basically, debt is just money that you bought. That’s how I define it. And it’s not a problem. Having it doesn’t mean you’re bad. You have a loan because you became a doctor; how is that bad? But it becomes bad as soon as the bills come and you have to pay it, right?

And so when everyone says, “Well, I feel better when it’s gone. I’m student loan debt-free,” I felt great for about a day, right? But I just say, “I think you’d feel even better if you can start producing income-generating assets instead.” So that’s a big one.

Kevin Pho: And my final question: What’s your take-home message that you want to leave with the KevinMD audience?

Bonnie Koo: Yeah, I think the take-home message is, the more you understand and you empower yourself regarding your finances, then you can practice medicine on your own terms. My brand is Wealthy Mom MD, and that’s the same for my website, Instagram, all the things, so wealthymommd.com.

Kevin Pho: Bonnie, thank you so much for sharing your time and insight, and thanks again for being on the show.

Bonnie Koo: Thanks so much for having me.

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