There are so many paths to financial freedom [PODCAST]

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“More than anything, I want to help our physician colleagues build financial freedom. We work with so many talented and passionate individuals. I know each one of you has dreams and passions that drive you. You may find your pa within medicine; some of you will search elsewhere. But I guarantee that financial freedom helps all of us live happier and healthier lives. It will even make us better physicians as well.”

Cobin Soelberg is an anesthesiologist and financial planner.

He shares his story and discusses his KevinMD article, “There are so many paths to financial freedom.”

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Transcript

Kevin Pho: 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. Rate and review the show at KevinMD.com/rate. Subscribe at KevinMD.com/follow. Today on the show, we have Cobin Soelberg. He’s an anesthesiologist and a financial planner. His KevinMD article is titled “There are so many paths to financial freedom.” Cobin, welcome to the show.

Cobin Soelberg: Thank you so much for having me today, Kevin.

Kevin Pho: We’ll get into the article in a little bit. First, briefly share your story and journey to where you are today.

Cobin Soelberg: Thank you. So my path through medicine is a little bit winding. I started med school, geez, it’s been almost 20 years ago, and after my second year of med school, I took some time off and went and got a law degree at the University of Pennsylvania and studied a lot of health law, tax law, and things like that. That was always part of the plan, and I wasn’t totally sure at the time how I was going to use that in medicine. I started my career in academics and ended up getting roped into a lot of the things at the intersection with the Joint Commission or with Medicare and CMS, and I really enjoyed doing that.

But where I found I ended up using that training more than anything was teaching personal finance to my medical residents. That quickly became my go-to topic in the operating room, especially as they were getting closer to graduation. Residents start caring about this stuff in a way that you don’t think about earlier, right? Like, you get a contract: What does this mean, or how much am I really going to make, and how am I going to pay off those student loans?

Fortunately, at the time, there was actually a certified financial planner who was employed by the university to help the medical students and the residents through the GME office. We started working together and teaching residents at the university, both in my own department and across the university. One day, as these things often go, he offhandedly said, “Have you ever thought about doing this as a career?” meaning financial planning. He really encouraged me to start thinking more and more about getting my CFP certification. At the beginning of the pandemic, when we all had a little more time because we had a break from clinical duties, I started getting certified in the state of Oregon, working towards my CFP, and taking on some of my first clients. So it’s been a fun journey, a tough journey, but enjoyable.

Kevin Pho: So you mentioned that story, when you were an anesthesiologist 20 years ago, teaching personal finance to the residents. In the last 20 years, what’s your assessment of the evolution of financial literacy among the physician community?

Cobin Soelberg: You know what’s interesting, Kevin? I think especially amongst the residents, there is a strong desire and hunger for more information. I would get approached all the time, and many people had great, insightful questions, like, “Should I do a Roth?” They had clearly done some reading. I think part of that has to do with the explosion of student loans over the last two decades. I mean, the average student debt is well above $200,000 now. Most physicians, at least once you’re in practice, aren’t going to benefit from that $10,000 or $20,000 that President Biden just announced.

But I think there’s definitely more interest and more engagement, and certainly within medicine, there’s been an explosion in the financial independence, retire early community. So there’s more out there. That being said, it’s not uncommon for me to see some pretty big financial mistakes. I serve as the treasurer of my group, and I’ve seen different things that can happen, whether someone’s trying to short the market in their retirement account or anything like that. It often amazes me, some of the things that people are doing with their money.

Kevin Pho: So you mentioned that there is a whole physician financial space that has been exploding over the last five to 10 years. But in terms of the formal education that these new physicians and residents get, is there any evolution in that?

Cobin Soelberg: Great question. I think so. What I find really fascinating is that most of the people doing the teaching tend to be either in anesthesiology or in emergency medicine. I’m not totally sure what to make of that, but what I’ve found is you have someone similar to my background who takes an interest in this and starts really pushing it in their department, and then their university, and across the country it’s slowly creeping out. It’s certainly nothing that’s been mandated by the GME for all residents, although I think many of us believe strongly that it should be, especially early in your career. But it really is a grassroots thing, where more and more people understand the absolute power of understanding how money works and teaching their residents so they can make better choices once they graduate.

Kevin Pho: All right, let’s talk about your KevinMD article. It’s titled “There are so many paths to financial freedom.” Now, for those of you who get a chance to read your article, just walk my audience through it. Share a story of why you decided to write it.

Cobin Soelberg: Sure. So I think it’s interesting to see right now, especially in the physician finance space, that one of the more popular things you’ll come across all the time is real estate. There are a lot of people who have different courses that they’ll teach you, or they’ll even go further and say this is the only way to build wealth. So I’ll often work with clients who come to me with five different things they want to do. They want to be investing in the market, they want to be investing in real estate, they might want to buy a rental property, or any of these things.

So what I wanted to tell our physician colleagues is that there really are a million different ways that you can get wealthy and build financial independence. The key is to pick one of those paths and stick with it instead of doing the flavor of the month, so to speak. This certainly isn’t a criticism of any of those methods, but my concern was what ends up happening, especially for those people who don’t really understand finance or investing, is that they just get overwhelmed because there are so many choices. Instead of picking one of those things, they do nothing, and they stay stuck. They don’t pay off their loans, they’re not really investing in the market or in real estate or any of those other things, and so they’re actually losing ground every single day because they just feel overwhelmed.

Kevin Pho: So you mentioned that there are other options other than real estate, and even within the umbrella of real estate, there are just so many options within so many options. Talk to us about some of those other options.

Cobin Soelberg: I think for many physicians, especially employed physicians, one of the simplest ways is just investing in retirement accounts. That has one of the biggest benefits, saving you on taxes now, which I think for almost every physician is one of the biggest hurdles to building wealth, right? We’re in one of the highest, if not the highest, tax brackets, and we just don’t get that many tax credits or deductions. So an easy way, without taking too much of their own time, is to invest in their own retirement accounts.

Kevin Pho: You have a lot of exposure to physician clients. Are you seeing a lot of physicians not taking full advantage of their retirement accounts?

Cobin Soelberg: Especially in my new role as treasurer, I was surprised to see that, but yes, more than you would think, and even in a higher-earning specialty like anesthesia, I think that’s very much true. Just to give you an example, in our own group, we have access to a 401(k) and then a cash balance plan, so we can put quite a bit of money aside. But even amongst mid- and late-career physicians, a lot of those physicians aren’t maxing out their 401(k), which tells you they may be saving in other places, but based on conversations around the water cooler with them, that’s not the case. To go even further, quite a few physicians are using 401(k) loans or taking money out of their retirement savings for other things.

It’s interesting being in the finance space, because you see someone like White Coat Investor or others who are doing amazing things and have done so much to educate our physician colleagues, and it’s very easy to think that most physicians have their ducks in a row, so to speak. But once you peek behind the curtain, you realize a lot of people are in a lot of trouble with their finances.

Kevin Pho: So you mentioned maxing out your retirement savings as one way. What are some other ways?

Cobin Soelberg: I think for a lot of physicians who are interested in it and have the time. I live in Bend, Oregon, where there are a lot of vacation rentals, and I know a lot of my partners have essentially bought a property, then bought a new property to live in and turned the other into a vacation rental. What they’ll all tell you is that it’s far from passive income. It actually ends up taking quite a bit of time. You have to stay up to date on regulations, you have to make sure you have tenants, and all those sorts of things, but it’s a fantastic way to build wealth.

I think for a lot of physicians, if you want to be a little more hands-off, you can invest in real estate syndications, where you’re essentially paying someone else to be the expert. They’re the general partner, so to speak, and they’re doing the due diligence and looking at these deals, and you’re providing the capital. So that’s a nice way to have exposure to that space without being a day-to-day landlord. I think a lot of physicians like that, and I get a lot of questions about syndications.

Kevin Pho: So for those not familiar with that, how does one go about finding a syndication, and in general, how much does one need to put up?

Cobin Soelberg: I think the way to think about this, Kevin, is that it’s almost like crowdfunding, right? There are many syndications now that are dropping their minimums to $5,000 and $10,000, whereas in the past, many were $25,000 or $50,000, and it wasn’t uncommon to see $100,000 or $250,000. So you ended up having really concentrated positions, which for physicians may not be desirable. But now you can actually get exposure: If you want to put $50,000 in, you could do five different deals.

Whether that’s through your site or White Coat Investor or others, there actually are quite a few links there. I tend to go through White Coat Investor quite a bit, in part because on a lot of the articles there, you’ll see people who have invested in those deals, and they can give you a lot of background on what has gone and what hasn’t. But there are quite a few companies out there. Part of it is doing a little bit of background yourself and seeing what those companies like to invest in, whether that’s big apartment complexes or things of that nature, and what sort of money they’re promising you. Another big piece, as opposed to being in the market, even with your retirement accounts, is understanding that the money is getting locked up for five or 10 years and making sure that’s OK for your current financial position.

Kevin Pho: Anything outside the world of real estate that you would recommend to physicians?

Cobin Soelberg: That’s a good question. For some people, I think what you’re seeing more and more, if you want to be a little more entrepreneurial, and you’re a perfect example of this, if you have the passion and the talent, is building a business. I look around at all of our physician colleagues, and it’s one of the things that’s so fun about listening to your podcast and reading the posts: just seeing the amazing things that our colleagues are doing. Whether it’s building a business, dermatologists building businesses related to skin care products or something like that, people doing physician coaching. I remember one physician who made basically a little doggy potty, right, like for when you go out on the porch. People are doing all sorts of fun things.

I can tell you, as someone building his own business, it’s hard, but it’s very rewarding and very fun. Knowing how brilliant and talented our colleagues are, I think betting on yourself is a great way to do it. I think that’s one of the best ones.

Kevin Pho: So I talk to a lot of physicians, and they’re just overwhelmed by their clinical duties. I’m a primary care physician, and I hear so many stories about these doctors getting burned out. They see 30 to 40 patients a day, and they have to chart up until two in the morning. How on earth are they supposed to get past that inertia of being just overwhelmed by the clinical duties, let alone start to research another source of income? How can they just get out of that rut and start doing some of the things that you recommend?

Cobin Soelberg: I’m so glad that you asked that, Kevin. I see that same overwhelm and that feeling of being stuck, and I’ll be totally frank: I remember feeling that way a couple of years ago. Just by happenstance, I ran into a colleague, an OB colleague, one night when I was on call, up at two or three in the morning, who did physician coaching. She didn’t work with male clients, but she made some recommendations, and I started working with a coach. What I’ll tell you is that so much of that is actually mindset and just changing the way that you view the world and your circumstances.

But part of the reason I’m doing what I’m doing in finance myself is to give people better choices and let them see that they actually can do things like work part time, or maybe retire at 55 instead of 60. For me and my clients, especially in anesthesia, it’s definitely easier for us to slow down. But there was a point earlier in the pandemic when we all had a little more time. For most of us, depending on where you were in the country, things just slowed down and stopped, and there was this collective sense that we were working too hard. I think all of us looked at all the things that we were missing, whether that was time with family, time with friends, or time for our own health. And now I feel like we’re busier than we’ve ever been, with even fewer resources. It feels worse than ever.

So I think the first question is to take some time and ask yourself what’s truly important to you. Part of this journey for me was really personal, Kevin. One of my closest friends from medical school passed away four years ago this month, actually, which is hard for me to believe. He was an anesthesiologist as well and one of the best people I knew: just so much fun, would do anything for any of his friends, an amazing skier. The amount of fun we had out in the mountains together was just incalculable, and now he’s gone. I think each of us, at least speaking for myself, and certainly from what I see with clients, we act like we have all the time in the world, and really, that’s our most precious resource.

It’s come home for me. We have an almost one-year-old, and I just turned 46 myself, so there’s been the lack of sleep. But it’s really been one of those slaps in the face: You need to be home and seeing this, because he is not going to be this young forever. The too-long piece of this is taking the time to get quiet, sit with the people who are important to you, and spend some time just reflecting: Am I living the life that I want to live, and am I spending my time in ways that are in alignment with what I value? What I really value, not what I say I value, but what I really value.

There are lots of resources out there. Like I said, I worked with a coach, which was game-changing for me. Part of it is getting your finances together, but more than any of that, it’s just dreaming and hoping again, and I think that’s important. That’s what I want to see. I want to work with clients, I want to work with other physicians who are so happy to be at work because they have all those other things in alignment, where they’re taking care of their family, they’re taking care of their health, and they’re taking care of their community. That’s my dream: to work with all of our physician colleagues so they’re just that happy and excited.

Kevin Pho: We’re talking to Cobin Soelberg. He’s an anesthesiologist and financial planner, and his KevinMD article is titled “There are so many paths to financial freedom.” Cobin, what are some of your take-home messages that you want to leave with the KevinMD audience?

Cobin Soelberg: It’s this: to sit down and take the time to ask yourself if you’re living a life that you really want to be living. I think what we do in health care is powerful and important and incredible in many ways, but it’s not the only thing that we need to be focusing on. And certainly, as a financial planner, getting your finances in order is one of the first steps on that. But I see amazing people every single day, and you guys are doing amazing things, so keep doing them.

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

Cobin Soelberg: Thank you, Kevin.

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