This Decision Cost me 13 Million Dollars, but Was it a Financial Mistake?

financial mistake

Disclaimer from the editor (updated on 2/27/2020): The “financial mistake” post generated a lot of controversy when it was featured on the popular Physician on Fire blog.  You can see from the comments in that post that people had very strong opinions about it.  See that post here.  

Please understand that the purpose of this post was to be an article encouraging people that getting out of debt early in your lives facilitates choices and limits financial constraints.  It wasn’t meant to be a treatise on working vs non-working spouses.  I firmly believe that each family’s choice on which spouse (or both) will be working full-time is up to each family and no one else.  No one should guilt or shame another family for choosing something different from them.  This article and the follow-up post (here) written from my wife’s perspective are our story, but that’s not the right story for everyone.  Enjoy!

What was your biggest financial mistake?  

Most people who read financial blogs have made at least one major financial mistake.  Maybe you’re familiar with some of these:

Those mistakes can cost tens or hundreds of thousands of dollars.

My biggest mistake will conservatively cost 13 million dollars over the course of my life.  I’m not at all worried about that.  In fact, I think it has been well worth it.

What was the big financial mistake?

My wife quit working.

It was an incredibly costly financial decision, but it was absolutely the right decision for our family.

How did we make the decision?

My wife was a year behind me in training.  The year I finished my GI fellowship, I got orders to Naval Hospital Pensacola.  

We were living in San Diego at the time and had a 7 month-old son.  She had one year to go on her pediatric GI fellowship.  

Suddenly we had to decide whether she should stay and finish her fellowship or stop.  There was no fellowship opportunity close to our new Florida home.  

She could stay and basically be a single mom for a year.  Alternatively, she could stop a year short of finishing her fellowship.  

It was a tough choice.  

Ultimately, we decided that the right thing for our family was for us all to move to Florida together.  She decided to stop working and stay home to raise our kids.

How were we able to take such a big financial hit?

We were debt-free!  


We decided during medical school that we would live on only one income and bank the rest.  Our goal was to pay off all our student loans before completing fellowship.  

We were debt-free just a year into my fellowship, and we just kept living on one income.  

It turned out to be the smartest financial position we could have created.  Suddenly faced with this very difficult choice, we knew that we were in a financial position for her to quit working for a while.  We knew it would slow our savings rate, but it wouldn’t cripple us financially.  

This is why I am so militant about paying off student loans.  I reject the notion of keeping student loans around and investing in the stock market instead.  

That math might make sense, but debt always limits your choices!!  I choose autonomy over wealth every time.  Financial freedom to live as we choose is critically important to us.  I don’t want debt to constrain the choices we make.

We bought a small home in Florida, packed up, and moved across the country. 

A $13 million dollar financial mistake?  Really?

I keep calling it a financial mistake, and it certainly hurt us economically.  But, I don’t consider it to be a mistake for our family.  It was a conscious choice, and we’ve been incredibly happy with it.  

This is what the FIRE movement is all about: financial independence gives you choices!

Here’s how I came up with the math:

financial mistake

Imagine a pediatric gastroenterologist’s salary of $150,000.  That might be a little conservative, but most of them work at academic facilities, not private practice.  I’m also taking into account time off, part-time work, etc.  

If we had banked all her income, which was the plan, I’m estimating she’d have had $105,000 left after taxes.  I’m figuring a 30% tax hit based on my projected future income. 

If we had just put that in an S&P 500 index fund for 30 years, it would have grown (at 8%) to $13,040,644.  

That’s the cost of doing business.  

Again, it was totally worth it!!

We made the decision together and with eyes wide open.  No one forced us into this.  

We made smart financial decisions for many years to make this choice possible.  We lived in a smaller apartment than we could have.  Our first home purchase wasn’t until several years after we became debt-free and finished fellowship.  We’ve never had a car payment.  We don’t buy lots of expensive things.  

financial mistake

The small sacrifices and smart choices put us in a position to have the choice to eliminate one income altogether.  

The lesson?  Freedom from debt should be a goal for everyone!

What my kids gain from our “financial mistake”

One of the most important factors in our choice was the impact to our kids.  At the end of the day, we determined that the best choice for our kids is for their mother to be at home with them.  

That’s not the right choice for everyone’s family, but it’s the right choice for ours.  The boys have benefitted hugely from having their mother around full-time.

She’s involved in their lives in so many great ways!  She volunteers at their school and finds great community activities for them.  She teaches them reading, arts/crafts, sports, social interactions, and so much more.

Her approach to being a stay-at-home mother is the same as her approach to medicine was: total focus on being the best.  

Of course, I think she’s succeeding.  She’s amazing.  I’m incredibly lucky to be married to such a wonderful wife and mother.  

The boys benefit from her direct involvement in their lives.  She spends at lot of time coaching them on personal responsibility.  They’re learning to be independent at a very young age.  

She thoroughly enjoys the work that she does.  It has been a lot of fun for me to continue working at least in part to facilitate that.

The great thing about being debt-free and living well below our means is that she can choose to go back to work eventually if she desires.  If she chooses not to, we’re still in a position to do that.  

Stay-at-home parents have an incredibly tough role, just as working parents do.  We all both full-time jobs.  

Dual-income families have an equally tough position, and each family has to make that choice for themselves.  

What did we give up?

Mo’ money, mo’ problems, right?  

Well, yes and no.  

I think that ultimately comes down to attitude and choices.  I’m not sure money gives you more problems, but it does magnify problems that you already have.

If you’re financially irresponsible with a little money, you’ll be a financial disaster with a lot of money.  If you make good choices with a small income, you’ll build habits that will lead to financial success once you build real wealth.

When we made the conscious decision to go down to one income, it cut our savings rate tremendously.  Like I said, we were basically banking her entire income and living on just mine.  

That’s going to delay our FIRE date.  Not that it matters, as I plan to continue working for a long time.  I love what I’m doing too much to quit anytime soon.  

We live in a much smaller house than we could legitimately afford.  

We drive old cars, for which we paid cash.  My car is 9 years old, and hers is 8 years old.  That 8 year old car was an upgrade last year from a 14 year-old car.  

We don’t take expensive vacations.  Our main travel is to go home to see family or go on short weekend trips in our state.  

I do a lot of moonlighting, partly to maintain procedural skills but partly to supplement my income.  That takes me away from family some weekend mornings.  

How much did we really give up?  I don’t know, but I guess it depends on your point of view.  I don’t think it was giving up too much, and certainly our boys seem to handle it just fine.  

It comes down in the end to what choices you want to make for your family.  

Would we do it again?

You bet!!

The truth is, we live very comfortably.  Even so, we still live way below our means.  I don’t feel deprived of anything, and yet we’re on schedule for an early FIRE date. 

In the last 12 years, we’ve never lived on more than 50% of our income.  The rest goes to savings, charitable giving, and some taxes.  Our taxes haven’t been too bad yet since I’ve been a government employee.  Once I go into private practice, I expect that taxes will go up.

We’re still debt-free, living well, and we’ve saved aggressively for retirement.  We’re incredibly blessed.

My wife and I both wake up every day secure in the knowledge that we’re living exactly the life we want.  Neither of us can imagine doing anything different right now.  

Final Thoughts

Going from two incomes to one, especially losing a physician’s income, is a huge financial hit.  Is it a financial mistake?  That’s a question each family needs to answer for themselves.  

We don’t feel like we’ve missed out on anything major.  What we’ve gained has been the family life that we always wanted.  

We made very deliberate choices and intentional sacrifices to make this lifestyle possible.  I encourage each family to follow our example (as we followed the example of others) and get debt out of your life as quickly as possible.  

Becoming debt-free is crucial if you want the financial freedom to choose the life you want.  Live well below your means, save and invest regularly, and feel the peace that comes with having choices.  

Then, if you want to make your own 13 million dollar “financial mistake,” it’s a choice you can feel comfortable making.

Further Reading

Leave a comment below and let me know what you think.  Does this sound like a journey you’d want to take?  What are your financial aspirations? 

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