On board today is Dev Raga, a practicing clinician with a passion for personal finance. Dev is a fellow podcaster and currently hosts the My Millennial Money Professional Podcast. Dev is a millennial, a first generation migrant from India and has some very interesting viewpoints about money. Strap in!
Dev Raga – My Millennial Money Professional
On board today is Dev Raga, a practicing clinician from Melbourne with a passion for personal finance. Dev is a fellow podcaster and currently hosts the My Millennial Money Professional Podcast, which is a podcast that makes money concepts simple for busy professionals.
Dev began podcasting because he wanted to leave a blueprint for his children and family in the rare event that he wasn’t around to explain the basics of personal finance and investing.
He’s a husband, father, doctor, podcaster and he’s a first generation immigrant. His parents migrated here in the early nineties from India and Dev grew up in Adelaide actually, went to medical school and then moved to Melbourne.
Dev is a millennial and learned from his parents at a very early age, that while money was not the most important thing, that it is very important.
Dev wants to keep working in the medical field, even after reaching FI and continues to enjoy interviewing many interesting professionals through his podcast.
Dev has some very useful viewpoints to share with us, so strap in, this one will get you thinking!
Episode 62 – Dev Raga – My Millennial Money Professional
- You can listen to My Millennial Money Professional Podcast episodes HERE
- You can find Dev on Twitter HERE, on Facebook HERE and on Linked In HERE
- Dev’s recommended reading:
- The JL Collins Stock Series
SaleThe Psychology of Money: Timeless lessons on wealth, greed, and happiness
- Ideal for Gifting
- Ideal for a bookworm
- Compact for travelling
- Housel, Morgan (Author)
- English (Publication Language)
Episode 62 – Dev Raga – My Millennial Money Professional
Captain Fi: [00:00:00] Ladies and gentlemen, this is your captain speaking.
G’day, and welcome to another episode of Captain Fire, the financial independence podcast, where I open the cockpit to some of the best and brightest in personal finance, as well as those who have reached or are on their way to financial independence. Before we get started, remember, nothing said here is financial advice, and you should always do your own independent research before making any financial choices.
With that being said, I hope you enjoy the episode and learn something new.[00:01:00]
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On board today is Dev Raga, a practicing clinician from Melbourne with a passion for personal finance.
Dev is a fellow podcaster and currently hosts the My Millennial Money Professional Podcast, which is a podcast that makes money concepts simple for busy professionals. Been looking forward to having a chat with you, Dev. How you going, mate? Yeah,
Dev: pretty good. It’s an extremely cold day here in Melbourne.
And I think you’re in Adelaide if I’m not mistaken, but it’s absolutely freezing in Melbourne today.
Captain Fi: It is bloody cold here as well, man. I’ve been inside on the computer. Actually, you have been doing a bit of writing today. And I must admit I, I may have turned the central heating
Dev: on. Right.
Well, I’m pretty much working from home today as well. So, no it’s been a good day, but lovely. And thank you very much for the invite. Looking forward to the episode recording.
Captain Fi: Yeah, my pleasure, mate. So before we crack in, can you tell the listeners a little bit about
Dev: [00:03:00] yourself? Yeah, so my online alias is Dev Raga.
That’s not my real name. I’m actually a doctor working in Melbourne. I’m a practicing clinician. But I’m also a podcaster like the captain and I started podcasting about five years ago now. And the primary reason for that is because I wanted to leave a blueprint for my children and family in the rare event that I wasn’t around to explain the basics of personal finance and investing.
So I’m a husband, father. Doctor, podcaster and my background of Indian ethnicity. So I’m a first generation immigrant and my parents migrated here in the early nineties and I grew up in Adelaide, actually, in a suburb called Burnside and subsequent to that went to medical school and then moved to Melbourne and have been in Melbourne now for over 20
Captain Fi: years.
Oh, you’re a traitor. You’ve left the God’s country, mate.
Dev: I must admit when I was growing up [00:04:00] there was a lot of rivalry between Adelaide and Melbourne because Adelaide always had the Australian Grand Prix. And I used to be a pretty keen F1 follower back in the day. And then Melbourne took it away from Adelaide.
So there was a lot of animosity. But ever since I’ve moved to Melbourne I’ve completely fallen in love with this city. There’s something about this city that keeps people wanting more and more, but of course the people of South Australia may defer, but I mean, I’m an avid Adelaide fan.
I mean, I have very vivid memories of growing up in Adelaide, amazing city, clean. planned very low cost of living back in the day, some great positives great scenery in Adelaide. But I must say, Captain ever since being in Melbourne, I’ve officially lived longer in Melbourne than I have in Adelaide.
There’s something about this city that’s infectious. Ah,
Captain Fi: so that makes you a Melburnian. Look, I’m just kidding, Dev. I actually really like Melbourne and I lived and worked there for a while as well. It is one of [00:05:00] my favorite places to visit and yeah, lots of family and friends there, lots of stuff to do.
Definitely really good restaurants, really good food, really good, foodie culture in Melbourne. Hey.
Dev: It’s amazing. Look I am fortunate enough to travel for work purposes and we have a fair bit of holidays and we travel up to three to five times a year. The amount of amenities and facilities and culture and cuisine that we have in Melbourne it’s second to none.
And there’s something about this place despite all its deficiencies, and we’ve gone through a rough sort of, COVID post COVID era and current economic crisis in Victoria. But I’ve really learned to fall in love with the city. But having said that, when I grew up in Adelaide it was safe.
My parents didn’t have to worry about. schooling because most public schools in Adelaide are of excellent quality and the lifestyle and the living standards in Adelaide for the price that you pay was amazing. So I was very fortunate [00:06:00] to be able to grow up in Adelaide. But once I finished my high school, like I just moved on.
Captain Fi: Yeah, I noticed that quite a few of my schoolmates they did go on to, bigger and better things. Larger careers, which were based in Melbourne and Sydney. but I think there’s a charm to Adelaide, which certainly attracted me back to it. And I think certainly.
Resonates amongst the fire community and I guess, just thinking about that with the fire movement it’s really exploded over the past, oh gosh, probably five years or so. The time that you’ve been podcasting and it’s interesting to see the different perspectives that everyone has on FIRE.
And I guess the acronym itself even means different things to different people. But at the heart, I guess it’s that not everybody wants to retire. But we all do need to reach financial independence at some point. So with that being said, Dev, what does financial independence mean to you?
Dev: Yeah, so that acronym FIRE, I’m very much an F. I. [00:07:00] person, but I’m not really an R. E. person. So you can imagine, I’ve trained for over, 10, 15 years to do what I do. So it would be unusual for someone like myself to retire early and not do medicine of some capacity later in life. Now, for context, I am a millennial and FI to me means options.
So my background as a first generation immigrant, the scarcity mindset, my parents came with myself and my elder brother because we were seeking opportunity. And we wanted to make sure that we utilized as much opportunity and maximize the returns of that opportunity. That’s the mindset that we had.
And, being first generation migrant, we didn’t have much money, so we were very scarce. And one of the things my parents did very well was they saved a decent amount of money and bought their first home relatively early on once migrating to Adelaide, in fact. And [00:08:00] that installed a principle in me that money, although is not the most important thing in anyone’s life, but it is important.
And to me, financial independence is all about options, buying my time, not having to worry about money. And I’ll explain this story by telling you a very poignant story that happened at David Jones back in the day in Adelaide when I was growing up and I was in middle school. And David Jones I think it still exists in the city, Captain.
Am I right?
Captain Fi: Ooh, you’re pushing it. I’m not big on department stores. I know Myer exists because I did actually… Recently buy something from Myers a shirt but I not too sure about David Jones. I might have to Google that one.
Dev: So, I guess to answer the question of what financial independence means in one scenario David Jones existed and attached to run a mall back in the day.
And for those of you that are from Adelaide, you will know what I mean back in the day in the 90s, it used to have a very steep underground [00:09:00] car park, even in the 90s. Anyway, I remember being on the electronics floor of that store as a middle school person and my parents were there. We just browse, we often go to Rundle mall and just hang out.
And it was at the time that the first plasma TVs were being released around the world. And this would have been early 90s, mid 90s. And at the time it was advertised for 40, 000 at David Jones. And I thought to myself, I went, there is absolutely no way anyone would be able to afford to buy that.
Of course, my naive self thought that was an enormous amount of money. And it is still an enormous amount of money to buy a TV. And right at that point, essentially a person essentially bought that TV. And I thought to myself, wow, there are people out there that do exist that are able to afford things like that.
Now, in my very sort of middle school simplistic way, I felt that money was important and therefore I was able to buy [00:10:00] things was very materialistic sort of I guess, hypothesis back in the day, but essentially what that moment reflecting on it now. Now what I know about financial independence was someone able to walk into a store and be able to buy something without having to worry about it.
Whereas if I twist that a little bit, what I want to do is I want to be able to walk into work and walk out of work and then have the option of reducing my work and buying my time and all I’m substituting that is a, plasma TV to actually buying time. So that was a very interesting moment in my life.
That’s when things clicked and I went, you know what, money is not the most important thing, but it is important. And I’ve made a physical and conscious decision to focus on, money matters and also became very frugal, even as a university student and medical student. And that’s how it all started.
And that’s what it means to me.
Captain Fi: Wow. Yeah. I definitely can relate to wanting [00:11:00] to be able to buy your time back because I mean, yeah, it’s like our. most valuable non renewable asset, right? And you only get a certain amount of time and then it’s gone. I mean, who better to see that than yourself, a doctor, probably reminded by that every single day when you work.
Dev: Every single day. And unfortunately, I see, part of the workplace being a doctor is, predominantly we see people that are not well. We see people that have made, unfortunately, bad choices in their life. We’ve seen people, unfortunately, come into bad circumstances in their life.
And, people don’t want to go and see a doctor when they’re sick. People don’t want to get sick. So I can empathize with a lot of patients who rock up to emergency or to the hospital or their GP with a medical problem because for them time is the ultimate resource, particularly for those critical diagnoses.
And you see it every day and that’s something that I’m conscious of. So,[00:12:00] I know that there are certain risk factors in my lineage, in my family. And I know that I want to minimize those and at the same time, I want to maximize my time that I can then utilize to do hopefully what I want to do.
And it’s a very interesting concept and I think I probably didn’t understand it, back in the day, but the core concept of scarcity, saving money and having hopefully a high income, that’s always been buried in me right from the 90s.
Captain Fi: Yeah. So this was fairly early on you’re talking about when you were in school and then at medical school.
So can you tell us a little bit about how your journey to financial independence has unfolded since then? And obviously it’s led you to, have a pretty bloody awesome podcast about personal finance, right? So obviously it’s gone well, but interested to see what’s happened between then and
So essentially, Pretty much high school and medical school, I was quite [00:13:00] determined to have a side hustle, to have a side income while I was pursuing my studies. So, in medical school I was tutoring and I was working on research projects. I was part of the Tasmanian health study.
I went to medical school in Tasmania and all of that meant that I earned an income. On the side, I was also on a scholarship. And that meant that I had to learn to live on relatively low income. I mean, we’ve all been students. You’ve been a student, students don’t have very much money to play with.
And part of that means I had to pay my rent, my utilities, etc. So I learnt budgeting very early on. I learned about income very early on. I actually didn’t invest until I started working after medical school. So I didn’t invest in my high school years or my medical school years. But I certainly had an appetite to make money.
I had an appetite to maximize it. I had a side hustle. I ran a pretty decent eBay business. import export[00:14:00] drop shipping. And I was a relatively bright student in high school and medical school. So I was able to sell my brain which basically my philosophy on that is basically, you can copy anything and everything, but you can’t copy my brain.
So what I do in terms of teaching is very unique to what I do. And essentially after medical school. I had a lot more disposable income than I really started thinking about investing and owning productive assets very early on. So the first target was to buy a house to live on and also buy an investment property and also really get started in the share market.
Now I didn’t know very much about index funds, back as an intern, et cetera, but certainly very early on. As a resident early registrar, I caught on to the fact that index funds was something that I’m very interested in because I’m very busy as a doctor. I don’t want to be doing any share market research.
And then I worked out a system [00:15:00] in automating that. And that has led me over the years. My 12th, 13th year of investments has led me by all imagination of average standards. I’m financially independent. But I certainly want to continue working because I think I have a lot more to give to the medical profession and my colleagues and also to my patients but at the same time, I want to be starting to reduce my work very soon.
Captain Fi: Oh, well, congratulations, Dev. That’s pretty bloody awesome, mate. What a super exciting story. And you’re clearly a very bright person and quite switched on and to, Basically achieve what you have at such a young age is pretty impressive. And it’s cool to hear that you obviously have such a sense of passion and purpose in your role that it’s not something you want to move away from.
And I love the idea of, going part time and slowly working your way into, a quote unquote retirement because I think the whole like fire cliff thing. thing can be basically it’s a one way trip to an existential crisis. [00:16:00] It’s probably not very good for your your mental health either.
And so Dev, one of the luxuries that you’ve afforded yourself and rightly so. Is the Tesla now as a commuting GP and a family man you’ve mentioned when we were organizing for this interview, you’re doing a lot of school sports runs, so you somewhat famously live on the road.
How has the Tesla changed this experience? Can you give us a bit about your experience and maybe how it’s compared to previous cars that you’ve owned?
Dev: Yeah. Look it’s almost. It’s interesting as a podcaster, I do talk about it on several episodes and it almost synonymous when people think about me as a financial podcaster, they automatically associated that with my car, just a little bit of background on that I bought a Tesla model three I had my eye on it when it was first released in the U S and as soon as the orders came out in Australia, the website opened, I ordered one.
And I received delivery, I was one of the, you know, first few, [00:17:00] first few hundred customers back in 2019 in September, I think I got my car and still, I think I’m one of the sort of highest sort of kilometers on the original made in America M3. And I just bought the cheapest standard range plus.
Now, a bit of background about that, prior to that I’ve always driven mostly cheap cars. In fact, I drove my 98 Magna until pretty much it caught fire on the M80. Cool, hey, cool. Fire literally caught fire because I was so cheap to buy another car. And, this is when I was just become a consultant.
And in fact one of the most famous stories was when I parked my car at a private hospital to do private assisting, I was asked to move the car from the doctor’s car park because they did not believe that car belonged to me. Oh, . So , that’s how bad that Magna was, and I treated it like shit to be honest.
And then it basically blew up. And subsequent to that I ended up [00:18:00] buying a sort of a European car and then I really did my mileage and calculations. And the main reason I bought a Tesla was because I felt that I was just driving so much, I was spending so much on petrol and servicing. And that’s why I migrated to a Tesla as a car.
You can’t really fault it. I’ve had an amazing experience with the Model 3 and I’ve only done one service. It’s done about 230, 000 kilometers. And if you listen to my episodes, I talk about it every 50, 000 kilometers. I have an episode about it and I have a detailed breakdown. And there are two things that I noticed when I converted to an EV.
Number one is it’s incredibly cheap to run, so you cannot compare petrol per litre versus kilowatts that you pay. Number two is the servicing. One of the things that the media don’t talk about when they talk about EVs is that you don’t need [00:19:00] regular scheduled servicing because there’s not much to service.
So, for example, it doesn’t have any oil compartments. It doesn’t have any bearings. It’s basically got a battery, got a couple of motors and some tires. And the only really thing that I service is I put the new windshield wiper fluid. That’s pretty much it. In fact, when it hit about a hundred and something thousand, I took it to Tesla and I said, look, I’m a little bit worried.
Can you please do a service on this? Because I don’t know if it’s going to go wrong. And they actually said, you know what, we’ll do it for you, but we don’t really need to. So the servicing cost is something that a lot of people don’t talk about. So the primary reason that I bought it was because I wanted to save money.
And my calculations are, on average, I’m anywhere between sort of 5, 500 to 7, 000 richer as a result of buying a Tesla. Now there is a caveat. And the caveat is people say to me, well, you could have just gone and bought a 21, [00:20:00] 000 MG petrol car. The thing is I drive so much that I need a safe car.
I needed something akin to an autopilot system and I needed something cost efficient. So I was thinking about buying a European Mercedes, a BMW, that sort of level. So compared to that. The model three is way better. Fast forward four years. The other brands are catching up and have caught up. And of course I’m not a great fan of Elon Musk.
I must say that what he’s become in the last sort of few years is a little bit of a worry. And I think that’s a bit of a worry for the brand of Tesla, but as a car. You have to admit that it is one of the best cars that I’ve ever had and driven. And I still don’t think the competition comes very close to it, even in 2023.
Captain Fi: Yeah, well, it’s becoming incredibly popular, of course Mr. [00:21:00] Money Mustache decided to follow suite after he heard Dev Raga had the Tesla. So he’s on team Tesla. I think Jeremy… Jeremy Schneider, personal finance club. He’s got a Tesla. Yeah, I know a good friend of mine is imminently about to buy one.
And so I’m going to wait until they buy one, then I’m going to, drive around in it and find out if it’s for me. And of course my partner’s always bugging me. She’s actually really keen , to get an EV. So maybe it’s into the not too distant future. There might be one in the Captain Fire household.
Dev: interesting thing about EVs, one of the advantages is that A lot of people don’t realize if you just download something called PlugShare, there’s a lot of free charging stations around Melbourne. And I’m sure there’s around Australia if you just open the map. So for example, about 37 to 40 percent of my charging happens near my workplace, which is a free public charger, which I just plug in.
It just charges for me. So I don’t actually spend my own money when I charge the car, and that’s what’s really interesting about it. I don’t supercharge it. So I [00:22:00] drive 180 to 250 kilometers a day. I don’t need to supercharge it. The car has enough range for me to do all that without any troubles. So all this sort of range anxiety and infrastructure anxiety and cost of owning an EV.
I think it’s a little bit overblown now. Is the cost enough to say it’s down to the average price of a car? It’s not. Maybe the cheapest in Australia is the BYD. You’ll see a lot of them on the road now. They look amazing. So if you’re thinking about an EV, certainly consider a BYD, but they’re about 40, 000 to 50, 000, which is still quite expensive.
I don’t think EVs are getting any more expensive. I think they are going to get cheaper and I think if you’re in the market for a car in that range of 40, 000 to 60, 000, you would have to consider an EV. If you don’t, financially I think 99 percent of the time. You’ll be
Captain Fi: backward. Yeah, I guess the biggest barrier for me at the moment is just the upfront [00:23:00] cost versus, I guess, just keeping my current car, which is, by all means still going well.
And as someone who, I guess, doesn’t drive very frequently as you’ve said with the mass, like if you’re a frequent driver, like yourself, it’s probably a no brainer to be switching. But yeah, definitely for like probably people that aren’t driving as much. You just have to do the maths for your individual
Dev: situation, right?
Absolutely. And I cannot stress this enough. A lot of people, probably thinking Devraga, doctor, drives a Tesla. Which is true. Back in the day, Devraga, doctor, drove a 98 Magna. So I would not encourage anyone to borrow money to buy a car, I would, if possible, if you’re buying it for your own purpose and private use, pay cash if you can.
I know it’s a lot of money, but pay cash. But please don’t buy a car just because it’s out there. Make sure that you need a car. Do your sums. I would never advocate [00:24:00] anyone spend more money than they can afford to buy a car. And I only bought a car like Tesla, quite later in my life.
I was in my sort of, I suppose thirties, right? So, certainly I would not advocate if you can’t afford it. Please don’t buy
Captain Fi: it. Yes, definitely. Just like the 40, 000 plasmas at David Jones. Exactly. Now Dev, I’ve got to ask. So you obviously host the very popular podcast My Millennial Money Professional.
And previously that was Dev Raga’s personal finance podcast. Can you tell us a bit about what you’ve learned? Because you’ve literally interviewed hundreds of professionals and some of the lessons we can maybe take away from that and apply to our own personal finances.
Dev: Yeah, good question.
So, I mean, the My Millennial Money professional podcast was previously known as Dev Raga Personal Finance and I started it because I wanted to leave a blueprint about financial concepts and principles for my children and my wife and my family. And I’m very [00:25:00] careful about what I say on the podcast in the sense that I.
Pretty much only focus on financial principles and concepts. And this is even before ASIC rules came out about what you can and cannot say in a Podcast and YouTube and all that sort of stuff and media audio visual media about what you can say without a license. And I’m not a financial advisor. I know I’m not a financial planner.
I’m a clinician. and then what happened was people started listening to it. I floated it to some friends and family and they said, Oh, this is actually quite interesting. And it got onto the medical students forum. Then it went on to the residence medical quarters, newsletters.
And then a lot of doctors started listening it and it was geared towards health professionals and doctors. And eventually non healthcare workers started listening to it. And that’s when I think. Glenn and I got together and said, why don’t we rebrand it? Why don’t we say it’s my millennial money medical.
And then we went to my millennial money professional because, it really is suitable for any profession because financial principles and concepts don’t change based on your profession. Then I [00:26:00] started noticing, I mean, you mentioned about hundreds of interviews. I haven’t actually recorded that many interviews with people.
And the reason for that is scheduling and timing and busy schedules. But now I tend to do that a lot more frequently. But what I’ve learnt is actually from the interviews that I’ve done that’s never been recorded. So what does that mean? So what happens is Every week. And I only do it for doctors and the reason why I don’t do it for non doctors is because I don’t understand enough of their profession to be able to, provide advice and career and all that sort of stuff.
But I do it for junior doctors and senior doctors who randomly contact me and I interview them, I have a chat to them about their life. And these are the things that I’ve noticed about the outcomes from those interviews, depending on who I interview. So the people that have done well, that contact me, we exchange ideas.
There are some common themes here, so they don’t complain very much. [00:27:00] So they don’t say. that their life problems or the problems that they’ve faced is as a direct result of other people. So that’s a very common theme that I’ve noticed amongst people of very high income earners and have built a significant net wealth or on their way to building a significant net worth.
They always have a plan. So, people that make a lot of money and build financial independence early, etc. They don’t do it by accident. I had a plan very early on and all I did was stick to it and try to execute it, refine it, learn from my mistakes. And the best way to answer that is you look at pro athletes.
LeBron James, I follow a lot of NBA, MJ the late Kobe Bryant. They don’t wake up in the morning and accidentally win championships. They practice, they plan, they execute, they learn, they practice, they plan and execute. So all of these people that I’ve spoken to have a plan. [00:28:00] And the third thing about their sort of personality is that they’re relatively aggressive.
Not aggressive in terms of, yelling and screaming, but they have a very positive and optimistic outlook. in terms of their future and the future of people around them in the world. So there are two types of people that I’ve met, everything’s going to burn, there’s going to be a recession, we’re all going to die.
Or there’s the optimists who say, actually, look at historically, we’ve done reasonably well, despite all the things that’s happened around the world and all the crazy things and bad things that’s happened. So they’re predominantly optimists, they absolutely Execute the three A’s. And I talk about this in my podcast all the time.
Availability, Affability and Ability. And if you’re a doctor or any profession listening in, if you can master those three things, that almost always leads to financial success. They are always learning. So, even though I’m talking to them, [00:29:00] even though these people are worth, 10, 15, 20 million.
They’re contacting me to learn from me and I’m like, no, I should be learning from you. So it’s a reciprocal arrangement. They’re always happy to learn and they’re always constantly reassessing the way they do things and constantly trying to do better. And of course, 99 percent of the time.
They’ve started early. They’ve thought about it, they’ve saved money, they understand concepts really quickly, and they start saving and investing very early on. And the people that have these sort of commonalities between them, that translates into significant income. And significant wealth and that’s a pattern that I’ve noticed amongst the people that I’ve spoken to, particularly those that are high income earners and high net worth individuals.
Captain Fi: Well, it sounds like the common thing is , they’re working hard. They have a really good positive mental attitude. And I mean, [00:30:00] it’s leading them through to success, right? I love that first bit about not complaining as well because. Yeah, I mean, it’s very easy to fall into those traps, isn’t there?
And, pessimists can sound smart, but at the end of the day, optimists make money.
Dev: Well, that’s right. They are able to see things in a different light. So where there’s potentially doom and gloom, or that if they have a positive spin on it, then they see opportunity.
And. Look, I’m not saying that there are problems or I’m not saying that there are not problems in this world. There are problems in this world. We have a lot of issues around the world. Everything from, ethnicity problems, racial problems income inequality and financial inequality and net worth, wealth inequality, et cetera.
But I think I’ve just noticed that these people acknowledge those issues, but they try and find a way to solve those issues for themselves. Rather than saying it’s all just too hard, it’s not possible. They are [00:31:00] constantly looking for ways to improve themselves. And when I speak to people, I can work it out within 5 or 10 minutes.
This person has got an excellent concepts that they want to develop, but sometimes I’d speak to people and unfortunately they don’t have those concepts because , some people want to have the cake and eat it too. And the concern that I have, and this mostly I talk to doctors, but this is true for everyone is that I can guarantee you, I can 100 percent guarantee everyone that’s listening in the only reason that I’ve got a high income and I’ve got a relatively high net worth.
Is because I worked hard and also other people helped me work hard and other people joined me and helped me to become who I am. I didn’t win the lotto. I didn’t get lucky. It was, a lot of hard work, but there are some things that are inherent in me. You have to say there’s a little bit of luck involved.
So for example, being male puts me at a, [00:32:00] unfortunately the truth is I’ve got the advantage. I don’t need to take long maternity leave. That means I have my income stream down packed. I have my super always topping up. A lot of women don’t have that option. And I don’t have. Any disabilities.
So people that have disabilities, physical or mental, they’re already on the back foot. And I think we all have to work together to try and bridge the gaps so that all of these people are able to access information and access information about finances. And that’s one of the motivators of having the podcast.
But fundamentally, the people that I speak to are optimists and you’re spot on. They believe that the future. is going to be good and they believe, generally speaking, humans generally are good people.
Captain Fi: I think that’s bloody awesome, Dev. I think you should be extremely proud about what you’ve achieved and, obviously you’re very humble there because, I can see that you actually have [00:33:00] overcome quite a lot of challenges and, medical school ain’t easy and what you do isn’t easy.
And there’s a lot of people that are very grateful for the help that you give them as a doctor. And I know that I and my family, we were in that position, unfortunately, not too long ago. With, serious health emergencies and gosh it’s almost something that you don’t think about until it happens and you’re thrust in that position and all of a sudden, physicians are like these gods that are, ultimately feel like they have the power to , wield life or death.
And so, yeah, we would have been absolutely lost without our treating team. So, yeah. And I think . The common traits that you’ve found from interviewing other physicians, I think they’re Bloody awesome. And for people who are on the path to financial independence, if you just think about those common traits and think about how you can manifest some of those yourself, it’s really going to help set yourself up for success.
Dev, I’m also super passionate about financial transparency and I think removing the barriers to [00:34:00] access to financial information is a awesome way to help remove some of those barriers and remove things that are in the way of people from building wealth. And with that being said, I’d love to spill some of the tea about your personal finances if
Dev: you’re up to it.
Yeah. So I’m happy to discuss some concepts and happy to discuss some specifics, but I might have to keep the actual numbers a bit vague if that’s okay. Yeah, of
Captain Fi: course. , no problems, man. So I guess the first one is Obviously, you’ve got your income from your career as a physician.
But what other streams of income have you managed
Dev: to set up? Yeah, so I’m a big believer in diversification when it comes to investments, and I’m also a big believer in diversification when it comes to income. And part of that is diversification when it comes to career. So, I’ve got pay as you go income.
I’ve got side hustles that I still do. So I do a fair bit of teaching for which I get paid. I get some income through the podcasts that I do, although it’s not a huge amount. And that’s not my primary driver. I get a fair bit of income through dividends [00:35:00] and distributions through index funds.
In fact, that’s sizable and I’ve got, rental properties that I get income through. But they do have some loans on them and they are leveraged. And I also, I’m not afraid. To, pick up extra shifts here or there and of those extra money that I get from those shifts, almost always I save 100 percent of that and I call that the marginal propensity to save.
So essentially I have my base income. And then if I make anything extra, I save almost all of it because, why would I spend it? I’ve invested straight on. So, I have at least five, maybe six sources of income and my plan is as my investment income gets bigger and bigger essentially that can offset the income that I make as a result of trading time.
So, therefore, that’s how I buy my time back. I’m hoping to keep more of my time and that way the investment income over time will compound and be enough to completely replace my, well, 70 percent of my current income. Yeah.
Captain Fi: [00:36:00] Fantastic.
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What about the flip side, Dev? What are your current monthly expenses looking like?
Dev: Yeah. So, I mean, our expenses, probably the biggest expenses would be schooling. We send our kids to private school which [00:38:00] is ironic cause I’m a product of the public school system. In Victoria, in Melbourne, especially unfortunately, dare I say the public school system and the equity of access of education is not the same across the suburbs.
slightly different when I was growing up in Adelaide. Back then I felt and we felt my parents felt that the public education system in Adelaide was far superior back then, to what it was, perhaps they used to call it VC. I think they still do it in Melbourne. So we’ve decided to make a conscious effort to send our children to private school, which is a significant expense.
So that’s, going to be, for a couple of kids, you’re looking at, between anywhere between sort of 30, 000 to 50, 000 per year. In terms of monthly expenses vague numbers we’re talking about probably around between sort of 30, 000 to probably maybe 45-50k, in terms of expenses.
But when I include expenses, I’m not discounting the fact that a lot of [00:39:00] those would be investments. So when I say expenses, so for example, if I’m putting money into my Vanguard into my super and things like that, I’d be probably not super because that’s employer contributed, but certainly my investments that I do, would count that as an expense.
So this is not money that we spend for pleasure. This is money in totals, everything from, mortgages to Utilities to telephone bills to car expenses to insurances. I’d say anywhere between 30-50,000 depending on the month.
Captain Fi: Wow. Yeah, that’s significant. And it’s interesting the concept about the public versus the private school.
And this was something that I didn’t really understand because, being an Adelaide boy and growing up and going to school here yeah, I just thought that all schools were like that. But as it turns out, I’ve, traveled and worked all over Australia and All over the world. And yes, it’s it’s not like that.
Not everywhere has a fantastic public school system. And I, I guess, education is important and, if sending your children to a private school, that’s really important for your family. Then, you know. that’s [00:40:00] your legitimate expense. And who is anyone to tell you otherwise?
Dev: Yeah, I think things are different in 2023 to what they perhaps were in 1990s when I was a student but having said that, I think there is a little bit of irony in me sending my Children to private school. And I think the concern that I have, particularly in big cities like Sydney and Melbourne and to some extent also major cities in Australia is I fundamentally believe and in fact, that’s one of the reasons why I spread the message of financial concepts and principles I fundamentally believe that education and access to information should be available to everyone.
I do not think that just because you go to a particular school in a particular suburb, that you should not have access to that information. I think that’s incorrect. And I think fundamentally I think every child should have access to that information, but I’m also a realist. And I think, Unfortunately, that is not the case.
And one of the things I’m not sure whether Adelaide has this, [00:41:00] it may have it now. It wasn’t really a big deal back in the day. But in Melbourne, school zones are a huge deal. So, parents are constantly hunting for school zones for the local public school, which is very good. And invariably, what tends to happen is that the schools in relatively good suburbs or the schools in some suburbs have a better reputation and reciprocally as a result, the house prices in those suburbs go up.
So when the house prices go up, well, guess what? You are eliminating a large proportion of the population in order to be able to afford to buy a house in that suburb. And therefore, you are selective about who can afford to buy that house. And therefore, you are selective in who can. Then by proxy, afford to go to that particular public school, then you look at rents.
Well, it turns out if you can’t afford to buy the house, you then go and rent a house in those [00:42:00] suburbs. And as a result, the rental prices are ridiculous as well. And that’s one of the huge problems that we have in Melbourne, where if you have a look at excellent top ranking public schools to get a house to get a residence in and around those school zone districts is becoming more and more expensive and unaffordable for the vast majority of people.
So I think the system in itself is inherently bias and basically we are, engaging in a system where, the haves and the have nots. And I fundamentally believe because I had the opportunity to have access to education. I think everyone should have the opportunity. I fundamentally believe that we need a better system, but in the current system It’s very skewed the way we do it in Melbourne and I disagree with the current system. I don’t know how to fix it, but it’s a real problem in Melbourne. I’m just curious, how is it in Adelaide? Is that something , that you’ve noticed more so? It wasn’t really the case in the nineties.
Captain Fi: It blows my mind away. Actually I remember it was not that long [00:43:00] ago actually. I was on a trip and I was chatting to, more experienced captain and he was explaining this to me about his place in Sydney because we were, often talking about finances and property and things in flight.
And and I said, Oh, why are you spending so much money to be in that suburb? And it’s, this extra commute and everything and yeah, it basically explained that it was due to the school zoning and exactly what you’ve just explained to us now that, yeah, people literally choose their property based on, schooling zones.
Now I’m not a parent yet. I don’t have kids. But certainly I had a. Brief look into this when my brother came to Australia from overseas, and we’re looking to get him into secondary school. And yeah, the zoning is a thing. And the school that I went to which is a public school.
Yeah, my mom didn’t pay anything to send me there. And it had quite a good reputation. They had changed the zoning. They changed the address. And so, We couldn’t get him into that school based on my mum’s old property which was a bit of a [00:44:00] shock. So yeah, he ended up having to go to a different school, which, we say may have a, not as good of a reputation.
But he seems to be doing well and, I don’t think it’s a deal breaker. But yeah, there’s certainly issues with zoning in Adelaide still.
Dev: Look, I don’t think people should make a decision on schooling just purely based on academics.
We didn’t just focus on academics. I think , we believe that there should be well rounded education. And people should have a choice in terms of where they go to school. And if they can afford to send their kids to private school, irrespective of, you know, what academics it is . And that’s completely fine.
I mean, a lot of people spend a lot of money to send their kids to certain schools because they have better extracurricular activities, better music classes. Some schools offer a year off and they go into the country and learn life skills and all that sort of stuff. And that’s completely fine.
But I just feel that I want To have a society, as equitable as possible . I have to say [00:45:00] that the Australia that I was growing up in as a first generation immigrant was very different to the society that we have today, where I’m just a little bit nervous and ironic.
We’re talking about money in this podcast, but I’m a little bit nervous that we are slowly encroaching on the sort of, if you have a little bit of money, then, you deserve a little bit better. And if you don’t have that much money, then you don’t really deserve the same level of service.
Now, education is not the same as buying a car or buying a house. And likewise, healthcare. I mean, it would be highly remiss of me to say, if someone walks into the emergency department or to their doctor we treat people based on how they look, how much money they have in their wallet.
We don’t, we shouldn’t, and certainly I hope that never comes down to that. And that’s one of the unique things about the Australian healthcare system, is that I don’t care where you’re from. As soon as you walk through those doors, You’ve got symptoms, you get treatment, and that’s just the way the public [00:46:00] hospital system should be.
And hopefully that shouldn’t change. But, I don’t know, is that something that you worry about? I mean, from a… society point of view. I mean, you’ve got plans to have kids, I suspect and just curious
Captain Fi: to hear your thoughts.
Yeah, definitely. I think, I’m not very well educated on, politics and those sorts of things but when I do the surveys, I definitely coming out as leaning towards socialism and I certainly believe that, things like schooling, things like healthcare, and a lot of, public infrastructure.
I think that should be freely available for us as citizens. I mean, we pay a lot in tax and the point is to, the taxation is to fund public projects and, things like healthcare and roads and schools, hospitals. And so personally, I’m not a fan of the. Sort of ruthless privatization that we’re seeing.
Things like toll roads absolutely shit me to tears. And the pay per service. I find it quite frustrating. We [00:47:00] have this kind of duality where I’m one second. Okay, we’re gonna we’re gonna pay all this money and income tax, GST and all the various other forms of taxes that we pay.
And then on top of that layer, there’s this new layer of pay per service, which she It’s just very frustrating and I would just prefer can we just have one or the other? But obviously I lean heavily more towards the socialist,
Dev: um, Aspect.
It’s interesting. And nine times out of 10, and every time I have a conversation with people and unlike this conversation we start by talking about life.
Then we start talking about money. Then we start talking about philosophy. Then we start talking a little bit about politics. My sort of general view is, I’m not going to say that I’m poor. I’m not going to say that I don’t have a high income. I do. And I’m not going to say that I’m not, relatively wealthy.
I am, but what’s interesting about this whole, socialism versus capitalism, et cetera. It’s not an all or none response. For example I enjoy. As a high income earner certain benefits in the taxation system that perhaps [00:48:00] a slightly low income earner may not enjoy. So when people say, oh, socialism is bad and capitalism is bad, well, it’s a hybrid system we have anyway, except we socialize the losses and privatize the profits.
I mean, we’ve all heard people say that it’s an interesting situation that I find myself in as I make more money and become more wealthier, things become cheaper. And I’m starting to find out there are some things that I enjoy that I didn’t enjoy. Just maybe, seven, eight years ago, because my income allows me to enjoy those and I get certain tax breaks and certain things that I can structure my things, which benefit me entirely.
I don’t know whether that’s a right or wrong approach, but as a society, we need to start thinking about it and say, well, hang on, how are we going to pay for all these services? How are we going to, make sure that people deserve an education, people deserve health care people deserve good quality water and good quality food, these are all basics and I fundamentally believe that [00:49:00] people deserve all those things, without having to pay for every single thing that we use because ultimately, what sort of society do we want to live in?
And I’m saying this, Captain, as a capitalist, I believe in the capital system. I believe that entrepreneurship and innovation is the way to go forward and that’s how humanity gets better. But at the same time, unchecked capitalism worries me. And I think that can destroy societies.
Pretty quickly and nowhere is that more obvious than our friends across the Pacific in in the United States where money just talks.
Captain Fi: Yeah, absolutely. And I just think, we live in , I think the best place in the world, Australia, I think has got to have the best quality of life.
And we’re just so lucky to be here. And I think to all of the benefits that we receive and yeah, we might have a few gripes here or there, but What an incredible place to live and, I said, as someone who’s traveled quite [00:50:00] extensively and worked in a lot of developing nations yeah, you probably wouldn’t catch me living anywhere else, to be honest.
Dev: It’s things that we take for granted and I highly encourage listeners, if you haven’t traveled outside of Australia, please do because you’ll see the diversity. And you’ll see, there are some great countries out there and there are some very poor countries out there where people are still very much happy.
I was actually speaking to one of my colleagues, recently, who Unfortunately, he has a relative back home in India who’s got a medical problem and he was asking me, okay, well, what sort of things would you recommend that the patient would get in Australia if the same sort of medical condition was here?
And it was a malignancy, so it was cancer. And I said, look, if there’s a patient with cancer, we’d often do a staging scan, which is basically, scan the whole body to make sure the cancer hasn’t spread. And they said, oh, that’s interesting because they only scanned the neck and they only scanned the chest.
And I said, well, what about the abdomen? What about the pelvis? What about the brain? And they said they didn’t scan. And I think the reason why they didn’t [00:51:00] scan was because the patient couldn’t afford it. Can you imagine? It’s something that I’ve never thought about. I would never withhold a scan for a patient in the Australian public system because they couldn’t afford it.
Because, guess what? It is our responsibility as a society to pay taxes so that person who unfortunately needs a CT scan to stage their cancer. It is our responsibility collectively. To help that person. I think fundamentally, that’s what sets us apart as a society than other countries. It’s as simple as that.
Captain Fi: Yeah, I Oh, sorry. You have to forgive me. Just feeling a bit emotional. Recently had a close friend who passed away. She actually had of all things brain cancer. And it went undetected and then, yeah she passed away in her sleep. She had a brain bleed she had COVID and long COVID and she had body scans, but actually nowhere had she had scans of her head, of her brain.
And it just, it went undetected and yeah, 30 years old.
Dev: [00:52:00] That’s very tragic. And I think, I mean, I’ll come back to the fundamental issue is I think, regardless of my stance on capitalism and regardless of the fact that I think that, if you work hard, you earn a lot of money.
I think you have every right to spend that money, however you wish. And I’m not going to stop people from working hard and building wealth. But at the same time, we all have to take a good hard look at society and say what sort of society Do I want my kids to have when they grow up and I want them to have a safe environment.
I don’t want them to breathe bad air. I want them to have good quality air. I don’t want them all to have to buy spring water. I want them to be able to open the tap and drink the water. That’s the other thing, Captain. The water in Melbourne is amazing. You go and have public water anywhere else in the world, including Adelaide, and you know that.
The water in Melbourne is amazing. So we have these infrastructures and services in this country that we just take for granted. And I think people have to travel abroad and experience what the [00:53:00] diversity out there is. And you’ll be quite shocked and surprised.
Captain Fi: . It’s funny, isn’t it? You mentioned how a lot of these conversations coalesce and.
I guess the thing is, unless you’ve got the basics with money sorted, a lot of people can’t really have these high level conversations or, they can’t really think about it. So I guess it’s Maslow’s hierarchy. And so that’s another thing that I really love about, the personal finance community and fire in general is that, it’s helping people to really stop living paycheck to paycheck and build up a buffer, build up investments, build up an emergency funding.
And really you can. Plan forward. And you can start actually having these conversations, which, it’s a really good thing and look, Dev, I guess, speaking of which emergency funds. What’s your thought on an emergency fund? Do you keep one how do you organize
Yeah, so absolutely essential. I think if you don’t have an emergency fund, it’s all about protecting your downside. One of the things that I’ve learnt is that More and more in recent years, as I’m starting to look at some really decent wealth, is that I’m [00:54:00] constantly thinking about protecting my downside.
So what does that mean? Now, if you have an emergency, a health scare, The car tire blows out, the car needs a new battery, the Magna blows up, that’s right, . You need to have enough liquid cash in order to be able to fund that emergency without having to go and borrow money or sell your assets when potentially the market is down.
That’s what the whole concept of an emergency fund is, and I have one. Mine is completely offset against my principal place of residence. So I just use an offset account to be able to do that. Now what’s interesting about it is I generally tend to think a three to six month emergency fund is, what’s out there in terms of three to six months of expenses is what the general recommendation is.
I tend to have. A very conservative view because I come from the protecting the downside point of view, and that is I prefer to have 12 months of income at any one time. And now that’s expanded to two years worth of income. And essentially the reason for that is because I’m reaching a stage in my life [00:55:00] where I don’t want to lose money unnecessarily, and I don’t want a emergency to put me out of business or delay my financial independence fat fire goal.
So I certainly think emergency funds are really important. And I think you need to have that down packed to have a system to have it down packed. And as I’ve become older and as my kids have become older, as I’m reaching a stage of wealth, I’ve noticed my emergency funds have slowly crept up, despite my investments also creeping up.
So it’s interesting that, I don’t just say. three to six months, I say 12 months of income and then expand on it based on how you want to minimize your risk. I look at my whole life every single day. I look at my whole life as how do I protect against any risk? How do I minimize it? How do I protect my downside?
And that’s why emergency funds are really important.
Captain Fi: I think you really hit the nail on the head there with protecting against risk, cause it’s a key risk mitigator. [00:56:00] And I guess other tools that we have in our toolbox to mitigate and I guess, manage risk personal insurances. So I guess.
Firstly, I’d love to ask what kind of insurances you have. And then secondly I know as a medical professional, you’re going to have a very strong position on health insurance. So yeah, I’d love to unpack what insurances you have and your take on health insurance.
Dev: So from a personal insurance, I have income.
I have trauma. I have life. I don’t have TPD. I’ve took insurance quite early on in my career. And I was lucky enough to get one of those old policies. I think the newer policies have a little bit more restrictions on them. So those are my personal insurances and we have them for both of us, myself and my wife.
Now the, yeah. Interesting thing about private health insurance is, yes I entirely work in the public hospital system, but I have private health insurance myself.[00:57:00] And I think the reason I have it is because my biggest asset is actually not my home, is not my car, it’s not my index funds, not my super, it’s me.
I am the biggest investment in my life because without myself and of course, my wife, who’s loving and supporting me doing this we wouldn’t be able to do what we have done and what we will do in the future. So therefore, I thought about it and I went, okay, if I have something of a medical emergency or even just a simple operation, like a hernia or something like that, I don’t want to be, put on a waiting list in a public health system, which is designed really to look at mortality.
It’s designed to prevent mortality, prevent people from dying. It’s not really looking at morbidity. So the best way to explain your answer is I got private health insurance because if I have a hernia and it means that I can’t work and I’m the best investment in my financial life, then that’s a problem that is not protecting my downside.
[00:58:00] Therefore it makes complete sense to offset that risk. And essentially transfer that risk to the private health insurance agency, which is what I’m doing by buying private health insurance. And in return, I’m paying a premium. And essentially, that’s essentially what a put option is, if you’re into really into sort of options trading and all that’s exactly what a put option is.
So essentially, when you buy insurance, you are trading your risk, and the insurance company is taking on that risk. So you’re transferring that. And in return, they’re just saying, Dev, pay me a premium. So for me, it’s a complete financial transaction. I’m not going to take the risk of delaying getting back to work because I’ll be on a waiting list with a groin hernia that’s painful, which happens in today’s public hospital system because, there’s a big waiting list.
Now we can go into the sort of, should we eliminate private health insurance and put all the money into the public funding and all that sort of stuff? That’s a different sort of question, but with the systems that we have. I have private health insurance for that reason. For me, it’s more of a financial transaction.
It’s more of a risk [00:59:00] trade off and risk transaction. And likewise trauma, income and life. I mean, you got to protect your downside. You got to have your house in order. There is absolutely no point going and thinking about investing and doing everything investing zero to 100 in investing. And then all of a sudden you’re not really protected from an insurance point of view.
And the kicker about all this It’s amazing how many doctors don’t have personal insurance. It’s staggering.
Captain Fi: Wow. Yeah. Look, I think that’s beautifully said, Dev. Honestly could not have said that better myself. I was super shocked about some of the behaviours of some doctors. So my partners.
Family, the physicians in the Philippines. And I remember when I first arrived and we went over for dinner, Oh, they’re all smoking,
Captain Fi: Oh guys, what are you doing? It’s funny, sometimes I guess, I go to my friend’s houses, then they’re tradies and they’ve got half built kitchens.
And I dunno, is that just the [01:00:00] human condition that sometimes we don’t take our own advice?
Dev: Yeah it’s interesting. I think it is. I’m constantly surprised. I mean, I see patients all the time. In fact, the largest cohort of patients that I would see that probably would benefit from personal insurance are tradespeople.
Because when you think about it. They are constantly using materials and constantly at risk of injury and ailments, chainsaws, whatever. And the number of trades people that I see who come in for injuries that don’t have personal insurance is significant and is a lesson for me to say, I don’t want me and my family to be in that situation.
And that includes for both partners, right? I mean, if something happens to my wife, then I would be adversely financially affected by it because I would need to take time off work. To care for my wife, right? So, I think you’re right. I think for whatever reason, it’s a very logical thing to do, isn’t it?
It’s very logical to just get personal insurance. Now, of course, there’s a flip side of [01:01:00] that. It’s actually very expensive to get personal insurance. And that’s again, a different conversation, but we should all be thinking about it and planning for it at some stage.
Captain Fi: Yeah, I’m a huge fan of insurances.
I think it’s super worth having. And also not to just like blindly rush out and buy all the insurance you can, but to think mindfully about, okay, how does this actually apply to my circumstance? And, there’s financial advisors and mortgage brokers that you can speak to, like professionals that you can chat to who are experts at this.
And one interesting thing that I’ve picked up, Dev, is that you mentioned you don’t have TPD. And now that’s because. of your investments, right? Yeah.
Dev: So essentially I looked at the stats. I think the most commonly claimed insurance, correct me if I’m wrong, is either going to be trauma or income protection.
That’s the most common. And essentially I didn’t think that I needed a significant lump sum in the event that I had permanent disability because I have. Assets to cover for that lump sum and also have trauma insurance. So if [01:02:00] something were to happen, amongst those major conditions, I would be paid out.
But yeah, primarily I decided that I, half a million dollar, million dollar payout would be great if I’m total permanent disability. But luckily I have enough investments to cover. And I guess the risk that I took was up until I had enough investments. Yeah. Anything could have happened.
But you’re right. Primary reason is I don’t need it at this stage. Yeah, I
Captain Fi: was just speaking to Louise Howard recently, and she’s a a high level executive in New South Wales Transport. Now, moving into the private sector and I asked her this exact same question and one of the things that she was talking about was, well, when you have enough money invested and she didn’t particularly have a huge mortgage, so , her tag was, I don’t need life insurance.
And, that was something that I actually come to a similar conclusion in my position because at the moment I don’t have dependents and I have a, a fairly healthy investment [01:03:00] portfolio. So for me, , I don’t really have any beneficiaries, so there’s not a need for me to be having that similarly.
Because I’m, quote unquote retired I don’t actually have income protection insurance because I don’t have a PAY job. So yeah, I just think it’s important to look at your personal circumstance and basically tailor that , to manage your risk appropriately. Cause yeah, if you’re just like starting out, insurance is super important, right?
And as your net wealth grows you begin to self insure over time. Correct. Yeah. So, look another question I’ve asked Dev is about savings rates. So, it’s one of the most important I guess, metrics when we talk about building wealth. I probably took it a bit too far. I got a bit too obsessed with it.
Maybe that’s just my personality. But nevertheless, I’m still interested to see whether you calculate a savings rate or you have a target and how that might have changed. Sure.
Dev: Yeah. So that’s changed over the years. So when I first started like yourself I was very aggressive, anywhere up to 70 percent savings rate of after tax income, but you know, I [01:04:00] was single, I just got married, no kids, pretty easy to do.
When you have a relatively high ish income in your twenties which, a lot of doctors, if you mid twenties to late twenties, you’re looking at anywhere between 90 to maybe 200, 000, depending on what sort of specialty you’re training in. So saving that much money was relatively easy as I’ve, gotten a bit older, had kids, et cetera, pretty hard to save 70%.
So I’ve set it on a minimum of 20 percent of after tax income is what I generally aim for, but some months it’s up to 50%. Depending on what sort of income I have for that month, and I have a base income, but also have other additional income. But a huge fan and huge advocate of people that save a lot of money.
Purely because the statistics show that the younger you are, the more earlier in financial independence journey you are. It’s easier. To save money than it is to reproduce their returns in your investments. To give you an example, if you make a hundred thousand dollars after tax income [01:05:00] per year, it’s actually quite easy for you to save 50%.
When I say easy, I’m not saying, cost of living pressures and all that. What I mean is you can make a conscious decision to try and save 50% of that if you really wanted to, and that’s really a 50% return on your money when you think about it, whereas. It’s pretty hard to take that money and get a 50 percent return every single year for the rest of your life.
In fact, it’s impossible. So earlier in life, your savings rate means and matters a lot more than later in life. So once you start building wealth, once you reach that sort of threshold, then It’s about your investment returns. And there’s a lot of studies to show this. And I followed that same philosophy earlier in life, saved as much money as possible, plowed as much money as possible into investments.
And all of them have just compounded over time. And now every quarter, it’s literally free money that comes into my account, which I reinvest, which is all dividends. I just [01:06:00] reinvest all of it. So yeah, big believer in high savings rate if you can. And of course in professions like medicine, your income would go up.
Therefore, 20 percent of a very high income is a very high number. So that’s why I’ll settle on the 20 percent after tax rule at the moment. Awesome.
Captain Fi: And so, I mean, you’ve mentioned dividends index funds and property, but are there any other areas that you invest your money
Super. I’m a big fan of super because yes, super is not touchable until the age of preservation. Yes, it’s restrictive. Yes, it’s legislative risk. There’s a legislative risk in everything. I mean, are we really to believe that you’re index funds outside of your super is potentially not at risk of legislation.
The government could change legislation on tax rates or franking credits or dividends, which they tried to do just a few years ago. So I’m a big fan of super because essentially the way I look at it is that for the first 27 and a half thousand dollars that I put into super my tax rate, if [01:07:00] I’d earned that money is 45 to 47 percent because I’m a high income earner.
Whereas if I put the money into super, it’s a no brainer. I got a 15% tax, which means literally I’ve made 30 percent of my money instantly without it even growing. So for me, from a mathematical point of view, from a behavioral point of view I love super but I plan to use super as the icing on the cake.
So the way I would look at super and I’m trying to use an analogy here, my investments and my investing life. may get me business class, but my super upgrade me to first class. That’s the way that I look at it. So it’s like I’m not relying on my super but it’s a nice hefty sum.
And I’m not going to say no to it because on the backend it’s almost always going to be tax free or very low tax.
Captain Fi: Yeah, it’s I love that the icing on the cake. It’s definitely my backup strategy as well. And the other thing is even we talk about like fire and early retirement, well, early retirement still encompasses.[01:08:00]
A conventional retirement, right? So yeah, you might have to retire in your thirties or in your forties or even in your fifties, but you will get to preservation age eventually. Right. So, yeah, I think it’s a really good tool
Dev: as well. Absolutely. I mean, ignore your super at your own peril.
Unfortunately in the medical community, there are a lot of people that think super is a scam. They think it’s a government scam that they actually take the money from you. And, it’s another way of revenue of taxation. And these are very high income professionals that are very sound, but They have very silly ideas like this.
So yeah, I mean, I think super is great and I’ll just have an industry. Super fun. It’s a simple, I don’t have an SMSF. It’s too complicated.
Captain Fi: Yeah, I would tend to agree with you there. I was pretty fortunate at a really good super. Due to my employer and yeah, it’s just really grateful to, to have a good program.
And, I was chatting to Andy Darroch recently, and yeah, he’s a huge proponent of industry super funds and he reckons you just can’t beat him. [01:09:00] I’m not really an expert on super, but I certainly know to listen to the people that are,
Dev: I think your industry super funds, unless you’re really clever and want to do something very unique with your SMSF, like you want to own a property or business practice or a medical practice or something very unique, which I can’t understand why people will do that.
There’s always reasons why people do it. I don’t see any value in it.
Captain Fi: Now I guess another asset class, which we don’t really talk about well, I don’t really talk about a lot is bonds and fixed interest. Is that anything that interests you or are you more just proponent into the growth stocks?
Dev: Yeah. So I have a diversified portfolio in my super. So that includes bonds and fixed income assets and property and all that sort of stuff. And that’s a very diversified global index fund. But outside of my super I don’t do any individual bonds. I don’t invest in any bonds because, I’m very young.
By most people’s standards, I’m a millennial. So I’ve got another 20, 30 years left of investing life. So I don’t think I need [01:10:00] bonds at this moment. And I’m aiming for a very high sort of investment portfolio. So, I don’t think even if the stock market crashed, 30, 40, 50% I don’t think for me, it would matter too much because, once you have a high target, it doesn’t really matter now if you’re targeting a lower portfolio, then yeah, sure, I think bonds is something that you’d want to think about and of course, That the people that bought bonds, five years ago with very low interest rates.
Because there’s an inverse relationship. Those bonds were worth quite a bit of money back then. But obviously, as interest rates have risen the same bonds will be worth a lot less because it’s inverse relationship. So, that’s an interest rate risk. That people have to take into account.
Captain Fi: Yeah. Look, I think I’m definitely in the same camp as you at the moment. I don’t have any I know there’s smart people that have come up with mathematical models and, the efficient frontier and all that. But yeah, I’m also just happy to accept a bit more volatility, take a bit more risk and get a bit more reward.
Now Dev, we were talking about this before and you [01:11:00] thought that this might put off. A couple of people, and I actually think this is an awesome goal because you obviously wanting to reach fat fire. So, I don’t know. Are you happy if I, if I ask this what’s your FI number or your passive income figure that you’re aiming for?
Dev: Yeah. So, I gotta be a little bit careful because people that listen to your podcast also know me. So, having said that I’ll give you a sort of rough idea. My portfolio is going to be in the range of sort of eight figures. I don’t think it’s going to be nine figures. I think I’d be lucky if I hit nine figures, but I think it will be in, in the eight figures.
So you can extrapolate that to I use a 4 percent withdrawal rate principle. So, if you have an eight figure portfolio. And it’s not going to be 10 million. It’s going to be higher then you can extrapolate that sort of , 4 percent rule.
Right. So, and I don’t want, people to think, that’s just ridiculous. I don’t think it is because. FI number is very personalized and remember, I’m not going to fully retire in my working life, I’m going to be partially [01:12:00] retired, but I’m not going to be fully retired because I feel that as a doctor, I have a lot to give back to society, I have a lot to give back to my colleagues, I have a lot to give back to medical students.
I love teaching. So I’ll be doing that. You betcha. So if you’re an aspiring medical student in about 20, 30 years time, you’re going to have Dev hanging around, lurking around in your hospital or your clinic, trying to ask you questions about random things that you probably don’t know the answers to but hopefully that gives you a bit of a ballpark figures, eight figures for sure.
I don’t think nine figures I’d be very lucky if I did.
Captain Fi: Yeah, definitely. And I guess you’ve mentioned that it’s you’re building a legacy here.
Dev: That’s right. Yeah. So, I mean, the actual number doesn’t really matter because once you have an income, let’s say half a mil or 600 or 700 or 800 and then you make a mil, it doesn’t really add too much value to your life, but the point that I’m trying to explain to people around me and certainly my children is that you need to have a plan.
You need to think about these things. [01:13:00] And when I speak to doctors on those sort of phone calls that they, we just exchange ideas. The people that have been successful or have a plan have thought about this. They’ve said, okay, this is what my target is going to be. And these are my, variables that I’m going to put on.
And if I get everything going against me, this is my, bad figure. If I get everything with me, then this is my good figure. So they give a bit of a range, whereas some people have no idea. And in fact, when I asked that question to a lot of people they go, I don’t know, I don’t know how much, I need to live on.
And I answered them in this way, I’ll say, what’s your income now? Right. And they say, let’s say they say, half a million dollars, right? Let’s put a ballpark figure. And then I say, okay, how much do you think you need to live on retirement when you retire in about 20 years time? And then they’ll say something like, I’m not really sure, probably about 70, 000 Dev.
And I’m like, you’re telling me that you’re going to be able to live on about 12 to 13 percent roughly of your current income. And that’s not going to [01:14:00] happen. Because we know studies have shown between 60 to 70 percent of peak earning years is what people need. So I think people need to think about it.
People need to be realistic about it. And don’t underestimate it because, when I speak to people No one’s ever rang me. Actually, this is an interesting way to look at it. No one’s ever rang me, Captain, and said, Dev, please help me. I have so much money. And I’m really stressed about it.
No one’s ever said that. That would be a weird problem. No one’s ever said, Dev, please help me. I’m worth 15 million and I’m not really sure what to do. 99 percent of the time when we have a chat, it’s usually, doctors that don’t know about basic finances or whatever. And I don’t provide any financial advice, but 99 percent of the time, when you look at what’s happening around us, you look at the media, look at what’s happening right now with the cost of living crisis.
99 percent of the time, people say, I just didn’t plan well enough and I don’t have enough money to fund my retirement. It’s not the other way around. And I don’t buy this argument when [01:15:00] people say, Oh, you don’t really need this. You don’t really need that. Why do you need this? Why do you need that?
They need it. That’s what they need. And that’s what they want. It’s okay to plan for that. And if you’re half wrong, so what, at least you’ve got, half of what you planned for. So certainly thinking about it. And I’ve thought about this very carefully. And I’ll put some variables in and even if I’m half wrong in what I’m trying to achieve, I’ll be fine.
But the number itself is not the important bit. It’s the process that I want people to understand that I want people to take seriously.
Captain Fi: Yeah, I love it. Look, Dev, it reminds me when I was a kid, I went to school and I mean, obviously, this is before I did a degree in space engineering and we had this painted on the wall in the classroom and it said, aim for the moon.
Even if you fail, you’ll still be among stars. And I think it’s a brilliant quote. And obviously I know now that stars are much further away than the moon. But I love the concept and it’s just exactly that. Even if you don’t achieve, these [01:16:00] phantasmagorical goals that you might set for yourself, you’re still going to be in a much better position than if you haven’t planned and taken any action at all.
Dev: absolutely. And the thing is, here’s the deal, right? About, , 50 minutes ago in this podcast, I mean, you said, and I said, time is the most important resource. It’s non renewable. And. Imagine if you’re 58, 60, about to retire and you find out actually, I can’t retire on the amount of money that I have.
I need to rely on the age pension or something like that. You can’t go back in time, because it’s gone. It’s never going to come back. And I don’t want people to be in that situation. But having said that, time is also non renewable right now. So you don’t want to be, working 24 7 and in the hope of, retiring on huge amounts of money.
That’s not what I’m proposing. There has to be a balance. And sometimes I worry that people focus too much on their time right now because They don’t want to focus on it later on, but they’re going to have to distribute it. They’re going to have to [01:17:00] focus on it all the time and have to have a balance. You can’t have it all.
You can buy anything in life. If you want, but you can’t buy everything. So there’s got to be a give and take here.
Captain Fi: Yeah, it’s a bloody good message. Now, Dev you’ve obviously been in this space for a long time. You have done a lot of education, self development, and you really doing fantastic work to help educate others and as well as with the mentoring and coaching that you’re doing helping other people to get their plans together. So with that in mind do you have any awesome resources that you might refer people to like, do you have any favorite books or, obviously whenever my millennial money professional podcast is a pretty good learning resource. But you know, are there any other ones that you refer people to or that you’re a big fan of?
Dev: I’m a big fan of JL Collins’s stock series. I think you might’ve just interviewed him recently on your podcast. And I spoke to him a while ago. I think it was a real eye opener. If you read the stock series, it just tells you [01:18:00] hard facts. And it’s very nicely written as well.
It’s pretty easy to read. I’m not a great book reader. I have read, Glenn James’s book, for example, which was nicely written. I’ve read psychology money. And I’ve read Noel Whittaker’s books, Retirement Made Simple, and I think there’s another
I think Making Money Made Simple. But the underlying themes about all of this is that the story is exactly the same. If you read all of these books, protect your downside, save money, make money, invest money, do it for the long term. So I’ve basically said the five steps, pay yourself first start investing into things that you understand.
Do it for the long term, reinvest dividends and wherever possible automate. Those are the five things that people need to know about. In terms of, I’m also a great consumer of YouTube. I don’t know if you are. Do you watch a lot of YouTube?
Captain Fi: Yeah, love it. I had grand delusions that I was going to make a YouTube channel and it’s a lot of work.
So I do appreciate all of the work that the content creators go to produce such awesome [01:19:00] resources for us.
Dev: Yeah I watch a lot of YouTube. When I say I watch a lot of YouTube, I have a YouTube playlist that I create and I just play it in the background while I’m driving. And I watch a lot of money content on YouTube.
I do not watch financial news on YouTube. And I do not watch those content producers that you know, Yeah. Uh, Clickbaity sort of titles. I don’t like that sort of stuff. And I don’t watch anything that I do not believe in, but there’s a lot of great educational content out there in terms of, if you just YouTube, passive investments or active investments or people that do videos about concepts, they do exactly the same as what I do, but they do it in video format.
So, I don’t have any, I subscribed to, I think about 400 channels or something that, that I subscribed to. There’s plenty of good content out there. But yeah, those are the main ones. I’m not a huge sort of, you must do this. You must do that. I think it depends on what your style is.
But for me, my style is mainly YouTube. And of course I listen to various podcasts as well. Yeah,
Captain Fi: especially, [01:20:00] driving around. Does your Tesla drive itself, Dev, or do you still have to steer?
Dev: So, I have the basic autopilot package and about 80 percent of my driving is autopilot. Because what that means is autosteer.
Oh, that’s so good. It’s autosteer, it’s radar cruise. I don’t have the complete autonomous package where it changes lanes and all that sort of stuff. I have tried it. It’s too conservative. So I don’t have patience for that, so I have to do my own lane changing, but I do a lot of freeway driving, so I can go, 30-50km without having to actively do an intervention for the car.
And that’s one of the reasons I bought it because, I can’t imagine holding a steering wheel and actively driving a car for long periods of time because it’d just be so tiring.
Captain Fi: Do you know what’s really funny, mate? Is that at one point, because we have Wi Fi in the Jets, and…
When you’re in the cruise and you obviously have autopilot set and everything’s all good. And I have my iPad with me and I was watching YouTube videos and like doing all sorts. It’s great, blogging, writing, doing uni [01:21:00] assignments whilst flying a plane. So it’s really cool to hear that you’re able to do the same thing from the Tesla.
Yeah. I mean,
Dev: it’s a very real possibility. One of my daughters, the youngest one, may not need a driver’s license. It’s a very real possibility that in the next sort of 10 years or so we would have a lot more automation in cars. If you had told me just 10 years ago that 80 percent of my driving is going to be on basic autopilot.
Which is, a lot of cars now have basic autopilot, Mercedes, BMW, etc. They all have it. I would have gone maybe not. But having said that, if you’d told me, 20 years ago, That we’re going to manage our lives with our smartphones, I would have gone maybe not, but you know, that’s what I mean by optimism and it’s quite staggering and fascinating how far and how quickly humanity has achieved some of the things that we have literally in my generation, which is the last 30 years.
Captain Fi: Yeah, it’s [01:22:00] pretty cool. I think the future is very bright. Yeah, I think we’re in a bloody awesome time to be alive. Dev, look, it’s been awesome chatting mate and I know you’re a busy doctor but I’m gonna ask you one last question and everybody hates this one. So, if you could distill all of your knowledge about financial independence into 3 takeaway points.
Very convenient, obviously for podcasting, what would they be, mate? What would you, your top three?
Dev: So the top three things. Okay. So the number one thing is don’t be afraid to earn more money. So slightly non traditional advice. I think in, the sense that there’s a lot of thought out there and I hear it from healthcare workers particularly nursing staff, but I hear this, Oh, I’m not going to do the extra shift.
Because I’m gonna pay 50 percent of that in taxes, right? That sort of mentality, I’m not going to make more money because I need to pay more to the government. [01:23:00] I think that’s dangerous, because essentially, what you’re saying is, I’m happy with the status quo. And I think people should be pushing the boundaries, particularly if they’re into financial independence and retiring early.
So I think, getting a fantastic education, trying to upskill having a career, making sure that you Increase your income is very useful. The second thing, of course, is once you do that, and this is just, I’m just going to give you three tips about money, captain, not about life in general, but three tips.
Once you’ve got a high income, you’ve got to keep it, the lifestyle creep is a real problem, particularly in healthcare workers, particularly in doctors, the number of doctors that get their fellowship and want to buy Mercs and BMWs is quite staggering without actually owning a home, for example.
So make sure you make a lot of money and make sure you keep a lot of that money and invest it. And the third thing I think is, okay, what do you invest in? It’s a very common question that you’d get, I’d get, everyone get. Here’s the deal. You have to invest in things in my humble opinion that are [01:24:00] productive assets.
I do not buy things that are speculative, thinking that they’re an asset. So for example, I own my own home. I understand that it’s a speculative asset because it doesn’t produce an income. And I know that in 20, 30 years time, I’m speculating that some Tom, Dick and Harry is going to come and buy it off me for two or three times as much money as what I paid for it.
Now that’s a speculative asset. I need a home to live in. I understand that. Whereas most of my other assets that I have that are true assets are productive, they rise in value over time. That’s the hope. And I pay very little fees for them. And in that time, they produce an income. And the simple way that I would explain that is that if you have a million dollars, and you bought a million dollars worth of gold, I’m going to use gold as an example, because I don’t buy gold, because it’s speculative.
And you buy 1 million worth of gold, you bury it in your backyard, and you come back 20 years later, and you dig it up, what do you get? You get that [01:25:00] gold? It hasn’t produced any dividends. It hasn’t multiplied. It hasn’t done anything for society. It doesn’t produce anything for society. And then you take the gold out of the ground and you go to the merchant, you go to people and say, Hey, I’ve got this gold, please buy it off me for one and a half million dollars.
Now, there are people out there who’d say that’s a good way of investing. I don’t think. That buying a non productive asset is a good strategy. So those are the top three things. I would make sure that you try and have a high income, make sure you keep a lot of that income, particularly early in your career, so savings rate.
And then when it comes to investments, think about investing in productive assets. And the easiest way to find a productive asset is the question you need to answer yourself is, if I buy this asset, What does it do for me? And what does it do for society? And generally, if you have a look at people that have made a lot of money, it’s people that solve problems in society.
It’s [01:26:00] businesses that plug a hole, produces goods and services that solve and provide a service that solves an issue in society. It’s those sort of businesses and those sort of people that end up becoming wealthy in their life.
Captain Fi: Yeah, stuff that produces value to people. Correct. Yeah, love it. Awesome tips, Dev.
Well, this has been awesome, mate. I’ve really enjoyed chatting with you tonight. Thank you so much for your time, mate. Before we finish up, is there anything that you’d like to mention that we might have missed or skipped over?
Dev: Look not really. I really don’t want people to lose heart and, be down particularly when I did mention, what my portfolio was likely to become and what it is and all that sort of stuff.
That’s just me. You don’t have to do that. It’s really important. What you need to do is look at your situation and think about your situation. Plan for your situation and execute your situation because I always go back to that NBA example, and MJ [01:27:00] didn’t wake up randomly one morning and win six championships.
He planned for it, he worked hard, he executed it, and he learned from his mistakes. And I think if you use that sort of principle in your life, for career, for money, for general life advice I think that’s the take home message in addition to the money messages.
That’s the take home message. So don’t get too disheartened by some of the nitty gritty figures. And if anyone wants to contact me via Twitter or Facebook I’d be more than happy to extend the conversation.
Captain Fi: Awesome. Yeah, dude, I’ll take the opposite viewpoint. I would say that, man, people listening to that, they’re going to be inspired.
And what I think it also shows is it’s like, Hey, we’re onto something good here because if there are wealthy people that are using these strategies and these strategies are available to everyone, well, that’s probably a pretty good sign that we’re onto something good here. Right? So, I would say absolutely inspirational mate and you were. Mentioning Michael [01:28:00] Jordan and, I can’t really remember the quote, but something comes in the back of my mind. He was talking about, whilst everyone thinks he’s just, amazing baller, he had missed like thousands of shot, like 10, 000 shots in his career, like hundreds of games.
But he just. As you say, he kept picking himself up. He kept practicing and, became a legend. So yeah, it’s not about the shots you lose. It’s just about that. You get up and try again.
Dev: Right. , it was a very famous Nike commercial is when he says I’ve missed more than 9, 000 shots in my life.
But people remember him for the shots that he made, not for the shots that he missed. And , I think part of the commercial was, people focus on my positives on what I’ve achieved. to better myself, I focus on why I missed those 9000 shots. What else could I have done to make it just 8000, even 7000?
And I think That’s an amazing way to look at things when you think about it, because, the first thing people think about when they think about MJ is, undefeated in the [01:29:00] finals, six championships arguably the greatest of all time. But his perspective is. I missed 9, 000 shots and why?
Captain Fi: Yeah, it’s perspective, right? Correct. Yeah, awesome. Hey, Dev, it’s been bloody brilliant chatting to you, mate. For anyone who’s listening and they want to check out Dev or get in contact with him jump onto the show notes. I’ll have links to his podcast, My Millennial Money Professional. He also hangs out on Twitter, Facebook, and I believe LinkedIn as well.
Correct. Yep. Yep. So yeah drop him a line and it sounds like he’s always keen for a chat. Dev, once again, thank you so much for your time, mate. Had an absolute blast chatting and look forward to catching up sometime again in the future.
Dev: Thank you very much for having me and wonderful.
Keep doing what you’re doing and thank you everyone for listening and joining in and participating. And good luck with your financial adventures.
Captain Fi: Thanks for listening to another episode of the Captain Fire Financial Independence [01:30:00] Podcast. To read the transcript or check out the show notes, head over to www. captainfire. com for all the details. If you have a question for the Captain, make sure to get in touch. You might even make it on the airwaves.
You can reach me online through the Captain Fire contact form or get in touch through the socials. I’m active on Facebook and Instagram, as well as a number of online finance and investing forums. And finally, remember, the information presented on the show and the links provided are for general information purposes only.
They should not be taken as constituting professional financial advice. You should always do your own research when making any financial decisions and make sure it’s appropriate for your personal circumstance.[01:31:00]