Welcome to the Late Starter to FI series!
I am a Late Starter – I did not discover FIRE (Financial Independence Retire Early) concept until I was 47. This was way later, I thought than others who seem to have it all together in their 20s and 30s.
Since I started to write about my own journey, I have discovered there are many more Late Starters like me, yay! It is such a relief knowing I am not alone.
I want to share our stories, our unique perspectives and show that it is absolutely not too late for us.
So in this series, I particularly highlight those of us who start our FI journeys in our 40s, 50s and 60s. And explore questions such as ‘where do we start’, ‘can we still retire early(ish)’, ‘what are the specific challenges for us late starters’. We look at our past, not to castigate ourselves but so that you can learn from us.
Please join in the conversation in the comments below. I encourage you to share your story if you fit the profile of a late starter. You absolutely don’t have to be a blogger or podcaster to share your story.
And if you’ve missed any of the previous stories, you can catch up here – Late Starter to FI series
Many late starters have experienced divorce – that is just a fact of life with more than a third of all marriages in Australia ending in divorce. The statistics in America are similar.
Today’s Late Starter, Xrayvsn is a doctor, a radiologist as you may guess from his name. He writes about how his divorce started him on the path to financial independence.
You may connect with him on Twitter too.
And now, here is Xrayvsn in his own words …
A Little About Me
I am a single male, age 49 who divorced right before I turned 40 in 2011. I have one daughter, age 14 that I have full custody of.
I am a physician (radiologist), who graduated medical school in 1997 and finished residency and fellowship in 2003.
I am a personal finance blogger at Xrayvsn.com, covering such topics as FIRE, burnout, and issues encountered with divorce.
I have been blogging since April 2018 and post content three times a week (Tues, Thurs, Sun).
My Lightbulb Moment
It was actually my divorce that started the chain of events that led to my “lightbulb” moment.
My nationality is Indian and I was sort of backed into an arranged marriage set up by my mother and relatives.
I was incredibly unhappy during my 7-year marriage and finally could not take it any more and filed for divorce.
My wife at the time became incredibly vindictive and made the 12 months of divorce proceedings quite contentious.
I estimated that I ended up paying over $300k in legal fees when all was said and done.
The divorce court split our marital assets with values tilting towards 60% in her favour.
My ex wife received the entire 401k (about $160k), a couple of condos we owned, as well as the majority of our savings account.
My net worth was therefore at its lowest, at around negative $850k, when the divorce papers were signed.
I was about to turn 40 and knew if I didn’t do something, I would never be able to retire, let alone try and retire early.
It is quite sad because, despite all the years of training (around 26 years) to become a physician, I never had one formal lecture on personal finance.
I decided I had to make a change and then began a quest to gain knowledge about personal finance.
I naturally gravitated towards other physician finance blogs when I first started looking.
I also stumbled upon the Bogleheads who helped me tremendously in my quest to achieve wealth.
Because of this, I became a fan of passive index funds as well as real estate (via syndications).
My income afforded me the ability to rapidly change my financial situation once I knew how to channel the funds appropriately.
I loved the concept of financial independence and knew that I wanted my money working for me and not the other way around.
I became debt free right right before my 45th birthday and have never looked back since.
Use this FREE Checklist to start your journey to Financial Independence
First Steps On The Path To FI
The very first step I took was to come to the realisation that I had to make a drastic change in my finances.
Gaining financial knowledge was relatively easy once I began to look for it on the internet.
How Far Along The FI Path Am I Now?
Beacuse of my significant income from being a radiologist, as well as a record long bull market and some other savvy real estate investments I participated in after my divorce, I feel that I am already at “my number” for financial independence.
My passive income streams are essentially covering my annual burn rate.
It is a complete 180 of how I feel now compared to how I felt at the time of my divorce.
Although the divorce was a painful and expensive year to go through, I feel that I would not be in this great financial position now if I were still married.
Will I Retire Early?
I am actually way ahead of the timeline I set out when I first started my path to FI.
I originally anticipated reaching my current net worth at the age of 53, which was when I thought I would retire early.
I chose age 53 because that is when my daughter would have graduated high school and leave for college.
I thought if I am pinned down geographically because of her schooling, I might as well work.
I am quite conservative and figure that even though I could retire now and be perfectly fine, working another 4 more years will give me a much larger cushion in retirement to rely on.
I definitely want to retire early and feel that the latest would be when I turn 53.
Medicine has been challenging with reimbursements going down and more and more hoops to jump through.
I know a lot of colleagues who are burnt out from the pressures of medicine and I would like to avoid that.
The Step That Propelled Me To FI
The most significant step I took was diversifying my portfolio and adding real estate.
There are a lot of tax benefits from real estate, the biggest being depreciation, that allowed me to have a lot of passive income without a major a tax hit.
My grand slam investment was investing in the ground floor of my medical practice building which we sold in May 2019.
I used the proceeds of the sale to continue to invest in real estate syndications so that I can receive “mailbox” money.
How My Relationship With Money Has Changed
I used to buy things that only brought temporary happiness.
Sure, it is nice to have the latest tech/gadgets out there, but soon something better comes along and you get into this vicious cycle of buying things you really don’t need.
I now prefer spending money on experiences.
Even years later, I still derive great pleasure reliving memories from past trips with loved ones.
In my younger days, I never really thought about retirement, which seemed like decades away.
I could have been much further along in my finances if I had put even a little away towards retirement all those years ago.
So, if I had a second chance, I would have certainly taken advantage of all the retirement account opportunities I had when I first started out.
Specific Challenges Or Advantages Of Starting Late
Unfortunately, the biggest ally an individual has is lost when starting late and that is time.
We all know how powerful compound interest is, which can give you a great head start if you start early.
So, the biggest challenge is to overcome that compounding boost that was lost.
Most physicians are already disadvantaged because they start their careers late and typically incur a lot of educational debt in the process.
But a high income can certainly level the playing field, as long as you do not let lifestyle inflation / creep slow you down.
Starting late also means that you have a smaller window in which you can make mistakes.
When you are young, you can make large financial mistakes and still recover because you have time to do so.
However, in your later years, an ill timed financial mistake can be disastrous.
As far as advantages of starting late, hopefully those extra years have provided wisdom and experience to make the best of what time is left.
I do see myself working as a physician for at least another 3 to 4 years.
The majority of the money earned will be invested in real estate and the stock market.
Although the COVID pandemic has given me a glimpse of a black swan event, it really has not impacted my investing strategy.
Back To Latestarterfire
Thank you very much for sharing your story with us., Xrayvsn.
From a devastating divorce with a negative $850k net worth to being financially independent in 9 years is an amazing achievement! All thanks to a high income but more importantly, your determination to eliminate your debt, live frugally and invest your freed up cash into index funds and real estate.
I look forward to following your journey into early retirement.
Catch up on late starters in this series whose finances were also affected by divorce: