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Join Cobin Soelberg, an anesthesiologist and financial planner. Discover the secrets to achieving financial independence as a physician, the importance of consistency in wealth-building, and the myriad paths to financial freedom. Gain valuable insights into managing your finances effectively, whether it’s through investments, real estate, or pursuing your entrepreneurial dreams.

Cobin Soelberg is an anesthesiologist and financial planner.

He discusses the KevinMD article, “There are so many paths to financial freedom.”

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast and get CME for this episode by clicking on the CME link in the show notes. Today we welcome Cobin Soelberg. He’s an anesthesiologist and a financial planner. Today’s 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, Kevin.

Kevin Pho: All right, so you have a dual role as an anesthesiologist and a financial planner. How did that come to be?

Cobin Soelberg: Thank you. My path’s a little bit different, in that this all started years ago, when I took a three-year leave of absence during medical school and went and got a law degree at the University of Pennsylvania. A lot of the wheels started turning at that time. I came back, finished medical school, went to anesthesia training and then took an academic position. As anyone in academics knows, you always have these teaching points you do with residents, and I quickly found that the questions they were asking weren’t necessarily anesthesia-related; they were finance-related. “How do I pay off my student loans?” or “How can I ever possibly save for a house?” So I started teaching that stuff to residents, which eventually led to opening my own practice.

Kevin Pho: So we talk a lot about financial literacy on this podcast, and about the fact that literacy is relatively low, I feel, in the physician community. What are your thoughts on that?

Cobin Soelberg: I would absolutely agree. What’s been bouncing around my head a lot lately is that in order to take risks, whether it’s something like what you’ve done, being very entrepreneurial, or taking a new position, or moving from academics to private practice, one of the most important things to do is protect against your risk. Whether it’s not having any disability insurance or being deeply in debt, I find that people don’t even understand their cash flow. They don’t know what’s coming in, and they don’t know what’s going out, so they can’t possibly pay off debt, much less invest or try to get ahead.

Just in my home state, the things that have been happening in the anesthesia marketplace in Oregon are crazy. Two of the big groups have lost big, big contracts within the state, there are outside groups coming in, and the hospitals are trying to employ the physicians. It’s just crazy, and if you don’t protect against that, it’s a huge hit to your finances.

Kevin Pho: So there’s been a lot of attention on the physician finance space. Of course, there’s Passive Income MD, there’s White Coat Investor, lots of those resources. Now, specifically over the last few years or so, have you seen the needle move when it comes to improving physician financial literacy, or is it still pretty dismal?

Cobin Soelberg: There are not a lot of studies out there, and the ones I’ve seen are a couple of years old. But anecdotally, what I would tell you is that I think there’s a lot more engagement in this space. I certainly saw that when I was in an academic position, and even now in private practice, people want to know more about the business of medicine. I do find that residents are more engaged and want to learn about this topic. Just this past week, I was doing a lecture for the anesthesia residents up at OHSU, where I used to work, and there were a lot of great questions and engagement. And what’s interesting, especially now, is that student loans have been at zero percent for the last three years or so, and that stopped. So a lot of people are like, “Holy moly, I actually need to figure this stuff out,” if for nothing else, then just for their own self-survival. So I do think it’s improving, thanks to people like you or White Coat Investor. People are at least understanding the basics and figuring out good questions to ask, and many are doing it themselves or finding someone who’s qualified to help them. I think those are all positive signs, for sure.

Kevin Pho: So anecdotally, I’ve noticed that a lot of the major physician finance platforms are run by anesthesiologists like yourself. Is there something about anesthesiology, or the people who go into anesthesiology, that selects them to also pursue business and entrepreneurial interests and go into the physician finance space?

Cobin Soelberg: It’s a really interesting observation you have there, Kevin, because I think it’s actually two fields: emergency medicine and anesthesia are the ones you really see in those spaces. I wonder if part of the reason is that we don’t have a patient population we have to keep on top of. We show up to work, we do our job and then we get to go home. So I think we have the ability to create off time in a way that a lot of physicians or surgeons don’t. I think that might be some of it. I don’t know that it’s the business part of it, because surgeons are running private practices, and internists are doing those same things. I really think it’s just that we have the ability to carve out time for those sorts of things in ways others don’t. But it’s sort of interesting. There’s Jimmy Turner, The Physician Philosopher; there are a lot of people in anesthesia, which for me is really fun, because I’ve had people I can lean on, ask questions of and get help from.

Kevin Pho: All right, so let’s talk about your KevinMD article. It’s titled “There are so many paths to financial freedom.” How did your article come together?

Cobin Soelberg: Well, I think that within this space, over the last couple of years, probably the most popular thing has been passive investing through real estate. Part of the concern I have, as an anesthesiologist but also as a financial planner, is that the tone of a lot of these pieces is, “This is the only way you can ever possibly get ahead. Investing in the stock market, or trying to be entrepreneurial, is super risky. Real estate is the only way to go.” So part of my goal was to let people know that there are lots of things you can do. There are very simple things you can do, like just maxing out your 401(k) at work and putting a little money aside in a brokerage account, that are going to get you there.

But if you have an interest in something like what you’re doing, being entrepreneurial, I know there are a lot of physicians out there who have ideas, whether it’s for a surgical product or a business-to-business thing that would help their practice run better. They have these fantastic ideas, but I think, in general, physicians are a little risk-averse. I think that’s partly because of what we do in our day jobs: We can’t get things wrong. If you screw up at work, somebody gets hurt. So part of what I wanted to say is that there are lots of things you can do, from the very, very basic to starting your own business, and to encourage people to think about that. I would ask you: I’m guessing you put a lot of time and effort into running this enterprise, but it seems like it’s pretty fulfilling to you, and you get to interact with a lot of different people and engage your curiosity.

Kevin Pho: Absolutely, and I think that leads to my next question. The name “passive income” implies that there’s little to no work that goes into creating that alternative income stream. You asked me how much time and effort I spend, and it’s pretty much more than I spend as an internal medicine primary care physician. So talk about what I think is a misnomer, passive income, and realistically, how much work needs to go in for it to become a viable income stream.

Cobin Soelberg: I think a lot of physicians get sucked into that, because they think, “That sounds great. I’ll just put some money in and then put my feet up, and it’s not a big deal.” I can tell you, with my own business, there is so much that goes on behind the scenes of being a financial planner in order to have a one-hour meeting with a client. There’s so much data to gather, so much information. I’m constantly staying up on the tax code and anything else that’s going on, much less all the other things just to keep a business running.

I would say the same thing is true in real estate. In order to get a viable business up, you need to figure out how to get those deals done. You need to find a really great real estate lawyer or real estate accountant. There’s all this background stuff, and then you constantly need to be in that loop where you’re looking at deals, and then there’s the whole other thing of managing your properties. So there’s certainly a tremendous amount of work that goes into it up front. You can start offloading it and getting a little more efficient, but it’s somewhere in the ratio of 20 to one. It’s a considerable amount. I think a lot of people get into that space and realize it’s way more work, and they really are not that interested in it. And that’s fine. I don’t think you would be doing what you’re doing if it didn’t really engage you and fulfill a need, because it’s a lot of work.

Kevin Pho: So where do physicians start? There are a lot of physicians who may not be in the physician finance space or the side gig space, and they’re listening to you now and thinking, “I want to start an alternative income stream.” But like you said, there are so many options available out there. So tell us the first step. What kinds of questions should they be asking themselves? Where should they start?

Cobin Soelberg: Thank you. I love that question. I was checking in with an old friend from med school, who is a urologist. We hadn’t talked in a while, and I asked, “How are things going?” He said, “I would love to be done, like, tomorrow, but I just don’t know what to do with my time, and I feel like there’s nothing else I can do.” So I gave him a little bit of homework. I said, “For the next month or so, pay attention to just two things. They might be related; they might not.” For the next month, look at the kinds of activities you’re engaged in where you feel in a state of flow, where time just flies. That could be time with your kids, coaching a soccer game, time out with your spouse or a particular kind of surgery you do. Whatever it is, just pay attention to those things. That was number one.

The second part was to pay attention to the activities that give you more energy. At the time, I had just gotten back from a mountain bike ride, so of course I was a little tired, but I felt great. Being outside in nature and in the mountains is, for me, one of the things that’s fundamental to who I am, so that’s not negotiable. And there are tons of things, whether it’s sitting in a meeting or a particular kind of surgery, that are energy-draining. So I asked him to do those two things: Pay attention to what gives you energy and takes energy away, and to when you feel really engaged in the work. Once you start noticing those things, you can start figuring out patterns of things you’re interested in, that you enjoy doing and that give you energy. If you’re working on those types of things, you’ll be naturally curious, so you’ll be able to spend the time it takes, like we talked about just a minute ago. And it’s fun. Your life can be fun again. It’s not just getting through an energy-draining to-do list. That sounds miserable. Who wants to live that way?

Kevin Pho: Yeah. One of the things you mentioned earlier was that physicians in general are a risk-averse bunch, and as an alternative income stream grows, it’s inevitably going to impinge on their professional time. Sometimes they may be faced with the decision of whether to cut back hours to engage in that alternative income stream. How can physicians get over that risk-averse mentality, and perhaps take the risk of cutting back on their hours to nurture some of these alternative streams?

Cobin Soelberg: I think as physicians we’re all naturally curious; I don’t think we would be where we are if we weren’t. But as your practice grows and your income grows, you do get a little more risk-averse. So I think part of it is just a mindset shift. A lot of what we do in the business space is just these little micro-adventures: Does this work, or does this not work? And you never want to do anything that, as Warren Buffett says, keeps you from staying in the game. In order to win, you have to keep playing. So you’re not taking risks that are going to completely ruin you. As a physician with a very stable day job, quote unquote, there are tons of ways you can protect against that risk: having some cash set aside, making sure you have disability and life insurance. Once you have all those things, all these other risks are not as big and scary as we think they are.

What I’ll tell you, Kevin, is that I worked with a great physician coach, Dr. Dina George, a couple of years ago when I was starting my business, and she really helped with a lot of this mindset. One of the key lessons I learned is just to take the next step. It doesn’t matter if that step is one inch or a foot or 10 feet; take the next step, because often you don’t know where you’re going to end up, but you know the direction you want to head. I do think a lot of us in medicine get held back by the fear that we have to be perfect. I’m here to tell you that I make mistakes all the time. They’re little mistakes, I learn from them, and then I do something different, and they’re not catastrophic, like we think they will be. It’s kind of like being in the gym. It’s a skill and a muscle you’re building, so start small.

Kevin Pho: So whenever I talk about this issue, the physician finance space, side gigs, alternative income streams, in our world it’s relatively commonplace. It’s kind of normalized in our world, in our Facebook groups and among the doctors we talk to. But it’s a relative minority when you step outside of the silo, right? There’s still some pushback, and there’s still a mentality that if physicians don’t see patients 100 percent of the time, they’re less of a doctor. So how do you push back against that mentality, that perception that if you’re dipping your toes into something outside of medicine, you’re not as good a doctor as someone who’s there 24/7, that antiquated mentality? How do you reconcile that tension?

Cobin Soelberg: Thankfully, I think that perception is diminishing over time. What I talk about with my own financial planning clients is that when you’re doing the things in your life that are engaging and important to you, whether you’re spending time with your kids, spending time outside or building a business, things that really engage you, A, it makes you a better person, but I believe it also makes you a better physician. Being so single-minded that you only do one thing, A, leads to burnout. We see that left and right. I thought things were getting better toward the end of the pandemic, but I think they’re worse than ever, and part of that is because we’re not taking care of ourselves. We’re not taking care of our health, we’re not taking care of our relationships and we’re not staying curious.

So the pushback I would give is that taking care of yourself always makes you a better physician, and that can take a lot of different forms. Part of what I found doing medicine and law, for example, is that I approach the practice of medicine differently, and I get to use those skills in different areas, like helping my group run as treasurer, and other things I love. It keeps me engaged. I don’t think it makes me a less engaged or worse physician at all.

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

Cobin Soelberg: I think the biggest is to start small. Just jump into a few of these things; none of this will be catastrophic. The other is that in order to start jumping into this space, whatever it is you’re interested in doing, protect your downside risk first. That’s very easy to take care of, by putting a little money aside and through insurance and other things. Then you can afford to take these risks, knowing they won’t be catastrophic.

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

Cobin Soelberg: Absolutely. Thank you for having me, Kevin.