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“Having control of your life with financial independence, if you don’t like it, then maybe back off and just go part time or explore some other avenues of income, turn a hobby into a business. You need those kinds of options and that’s where I think financial independence comes in.” -Dr. Amir Baluch
In today’s episode, Jen has an in depth conversation about finances with Dr. Amir Baluch. Dr. Baluch is the founder of Financial Wellness MD and the author of Make It, Keep It: The New Rules of Wealth Preservation for Doctors. In this episode, Dr. Baluch shares his wealth of experience with real estate investing and ecommerce stores. At DocWorking one of our goals is to help physicians gain financial independence. Dr. Baluch shares that goal. He is also offering DocWorking listeners a discount to access his Wealth Strategies Summit. Tune in to this episode to gain insight and knowledge about how to start your own passive income stream and get on the road to financial independence now!
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Podcast produced by: Amanda Taran
Please enjoy the full transcript below
Amir: Having control of your life with financial independence, if you don’t like it, then maybe back off and just go part time or explore some other avenues of income, or turn a hobby into a business. You need those kinds of options. That’s where I think financial independence comes in.
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Jen: I’m Dr. Jen Barna. I’m so happy you’re here with me today on DocWorking: The Whole Physician Podcast. My guest today is Dr. Amir Baluch, a practicing anesthesiologist, author of Make It, Keep It, a financial primer for medical professionals, and founder of financialwellnessmd.com. Welcome to DocWorking: The Whole Physician Podcast.
Amir: Hey, thanks, Jen, for having me.
Jen: I’m so glad to get to talk with you today. I think we have a lot to cover and a lot to discuss. I’m especially curious just getting started to hear about your story and how you’ve come to see financial independence for physicians as such an important mission.
Amir: Well, my pathway wasn’t very traditional. I thought growing up as a kid, “Hey, I’m just going to go straight through school, ace everything, get into med school.” I had pretty good GPA and everything. I was applied to med schools. I had four interviews, but I didn’t get in the first time I applied. That shocked me a little bit. I was thinking, “What am I going to do the rest of my life?” I can’t be a doctor. At that same time, that same year, my dad actually went bankrupt in his clinic. He was an internal medicine doctor. Now, the money that I thought he might float me until I figure out why was gone. So, I started reading a lot of books. I’m like, “What do I do?” I became a librarian and an EMT. I reapplied. I did a bunch of different things.
As I was reading, I learned that most multimillionaires have multiple streams of income. That’s number one. Number two, from my own experience, I learned not to trust just one source of income or one pathway. Those are the two most important things that I learned during those one or two years where I was not in medical school. That’s what stimulated me to constantly learn about financial wellness, and financial literacy altogether, and then, over the years, I’ve learned a lot, and people ask me questions. That’s why I’m like, “Well, let me write a book about this thing, and share my knowledge, and expertise whenever I can.”
Amir: Wow. Let’s back up there because you bring up so many important points. First of all, I think it’s really interesting that you have the history of applying to medical school twice, which I think a lot of people do, and it’s often not talked about but it should be because from everything you’re telling me, it sounds like when you reapplied and got in, you had a much richer experience to bring with you in your journey to become a physician, and had you not had that experience of reapplying and had that time to explore the concept of financial wellness, you may have skipped that step and made a lot of financial mistakes that many of us have made. [laughs] I think you saved yourself by having that time to invest in your future.
Amir: Yeah, that’s absolutely right. Those were two of the best years of my life. I really had to find myself and explore other ways to earn a living and make money. I met so many people in businesses. I was with Business Network International. I joined the Chamber of Commerce. I started an electronic payments business. I got my first LLC made. I don’t even know what it was I was 21 years old, just so you know. I was doing door-to-door sales. I learned how other people made money in life, and I picked up a lot of mentors along the way. Then, even when I got into medical school, I continued to learn about it and keep in touch with those people, and I even had a few businesses through medical school and residency for extra income along the way. So, it was definitely a blessing in disguise, you could say.
Jen: Well, speaking of businesses along the way, do you have any business ideas in case any medical students or residents who might be interested in a side gig are listening?
Amir: Oh, boy, there’s a ton of things. There’s so many different ways to make money. Now, it depends you want to use your medical license or you don’t want to use your medical license. I’ll say for the medical license side, a few things you can look into is medicolegal consulting. If you’re a physician that also has a clinic or have established patient base, why not add some cash-based services to that practice? You can have aesthetic practice. You could have medical weight loss practice. You can do telemedicine from home, that’s really big. I actually just talked to somebody who’s planning on going public with a telemedicine company out in New York. These guys are growing like wildfire. So many physicians want to work from home and then make some extra money.
So, plenty of ways you can make money with your medical license. If you’re not going to use your medical license, how much time do you have? You could start looking probably more to creating passive income and partnering with somebody that has the time and not the money, and then you just supply the money and just watch it from a distance. That’s one way to do it. Or, if you do want to actively be involved and not use your medical license, then you’ve really got to go, dig deep down inside to find out what actually makes you happy, and just be the best at it. Because if you’re in the top 1% of whatever you do, there’s always six figures at the end of the rainbow. It doesn’t matter what you could be. If you’re in the top 1%, and you scale it up, you can replace your physician income, or at least half of it, or a third of it and go part time with medicine. So many different options.
Jen: Speaking of different options, we talked about prior to this conversation, we’ve talked a little bit about financial independence. There’s the financial independence, retire early movement, and both of us I think are interested in other options. I think I had mentioned to you that my idea of financial independence with the option to retire early, renaming it FOIRE, and you had also said that, you enjoy your work, and you want to work until forever, basically, as long as you possibly can in your medical career, but you have all of these other businesses on the side. Can you tell me a little bit about which types of streams of income that you have found to be the most successful, and how you manage all of these?
Amir: Yeah, well, the two points you made, just having the option to retire but not retiring, I’ll talk about that. And then, I’ll share some my side gigs, or hustles, or maybe they’re not really side gigs anymore, because they’ve gotten pretty big. But this whole concept of retirement, I don’t know who came up with this idea, because in other countries, they really don’t think about it. Then, another thought crossed my mind. I made a couple observations the last 10 years like, “We’re in the top 1% of income earners. Why are doctors now retiring when they’re 50, 60, 65. What is going on?” I think a lot of people like their job, that’s one. Number two, they don’t really plan for it. But another thing, some people like their job. I know people that are in their 70s that are physicians that like showing up every day. They get a little bit of social interaction. It gives them a reason to get up in the morning. If they enjoy it, why would they want to stop, and then what are they going to do? What are they going to get up for in the morning? You then have some purpose in life, which probably that’s one of the biggest creators of happiness is knowing what your purpose is. If your whole life you train to be a physician, and you’re just stopping at 10 years after residency is over, what are you going to do? But having control of your life with financial independence, if you don’t like it, then maybe back off and just go part time or explore some other avenues of income. Turn a hobby into a business. You need those kinds of options. That’s where I think financial independence comes in.
How did it work for me? One of my biggest, I guess, side hustles or business, I’m just going to say businesses, real estate, and specifically real estate development, it took us a long time to build. We started with rental properties, then we did fix and flips. We’re going to do a fix and flip, let’s just do a whole subdivision. So, now we just build subdivisions. My brother’s running that and, we’re building seven, eight figures worth of homes a year right now, and we have a pretty huge team. This took about probably 10 or 11 years to get to this point. Another one that’s replaced a little more than half my income so far is e-commerce. That’s one of the things I did. When I didn’t get into medical school, I started selling things on eBay with a wholesale model where I’ll just buy my favorite supplements I took myself from a wholesaler and sold it on eBay, and it was pretty profitable. I was making $2,000 to $5,000 a month, and when you’re in medical school, that’s a lot of money. You can buy a lot of drinks at the bar for your friends and buy popcorn at the [laughs] movies, and that’s what was important to me.
Jen: That’s a little bit harder than it sounds, to find something that actually is profitable. Of course, eBay and Amazon have become popular side gigs for people as small business owners. Can you speak a little bit specifically to how you have managed to find niches within those that are profitable? There’s a lot of competition there.
Amir: Yeah, there’s a lot of competition, but if you’re in the top 1%, it really doesn’t matter too much. I actually enjoy the competition. It keeps me on my toes. In 2001, when I started on eBay, there wasn’t any software I could use to analyze products. It was kind of trial and error, and it took some time, and I couldn’t really scale it that big, so 2k to 5k was the most I could do. But now, I have a pretty big e-commerce team. We have about 108 employees in Pakistan, and we’re managing about 35 stores. We have 18 pieces of software that we subscribe to. Out of those employees, six people do research full time. We’re talking about 12, 14 hours a day times six people. We see a lot of products. When something’s a winner, they go through a 28-point checklist that we have, and then we test it in a small amount online, and if the profit margins are there based on what the software suggested it should be and what it predicts, okay, then we go for a bigger order, like a $5,000 order, $25,000 order, or something like that. It’s a lot of testing with software first and creating prediction models and that’s for a wholesale model.
We also do private label where we’ll build products from scratch, which is a little bit more art. That one is a lot more research, and just a lot more work because you need to brand yourself and you’re competing with established brands. You’re trying to get your 1%, 5%, 10%, 20% of the market share online, and it takes longer to build that one up. But profit margins are higher, usually 20%. So, those are the two different ways. But without building a team, it’s not going to happen. It’s very hard to do a one-man show, although it’s possible, you’re going to put in a lot of time. It will end up being a full-time job if you do it by yourself and do it right.
Jen: So, you provide that service for physicians as far as startup for e-commerce?
Amir: Yes, I don’t advertise it too much, but if somebody is really looking for it, especially, my W-2 doctors out there that don’t have their own business, just the fact that I create a business for them, and they could run some deductions through there, or hire their family members and things like that is a pretty good opportunity. We’re selective on who we pick. We want to see what their mindset is, because if a doctor hasn’t started a business from scratch or even have the patience to wait six months to a year as we build a business, and get the reviews, and build relationships with suppliers and things like that. You have to have the right temperament and basically, you have to have the entrepreneur mindset and have delayed gratification. But if people are willing to do that, then we do take on one to two people a month and build stores for them.
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Jen: We’ll have to get all of your information, of course at the end so that anyone who’s interested in hearing this and might want to learn more about it will know how to reach you.
Amir: Right.
Jen: You’re currently doing real estate and e-commerce businesses. You are very far along in the business development and have been extremely successful with it. For someone who’s just getting started and doesn’t know where to begin, what do you recommend that they do? What would say the first five steps that they should take to get themselves into a situation where they are creating a stream of income from a side job?
Amir: Yeah, one of the easiest things to do is probably buy a rental property or an Airbnb. The reason I’m saying that is because there are plenty of property managers out there. So, the management side is there and you’re supplying the money. Another reason I like rentals or Airbnb is if you do the research, most people make their first million dollars in real estate. This is where millionaires live. Another thing is you get a lot of tax deductions when in a high tax bracket as physicians. Another reason is, if you look at the top, I don’t know what you want to say, the ultra-high net worth pension funds, endowments, or individuals, if you look at Yale and Harvard endowments or you look at Tiger 21, which is a group of investors with liquid net worth $10 million enough to be a part of that club, they have about 40% of their investment portfolio in real estate is takes up the largest amount. So, at some point in time, you’re going to have to get involved in real estate if you’re not. It just has to happen.
Now, once you decide you want to do to short-term rental or Airbnb, and if people have questions about how to decide, they could let me know. I could put them in the right direction. But then you want to find some mentor or at least get some information, and there’s plenty of courses on there. If you don’t want to pay a lot of money for a course, you could always get, what I think is the best book, called The Millionaire Real Estate Investor by Gary Keller with Keller Williams. That has so much information in there on starting off in a rental empire. That’s a great place to start for 10 bucks, and just curl up by the fireplace, and just fly through that book. [laughs] And then, I’ll catch you up to speed really, really quick.
Jen: Fantastic. Another great resource I found is BiggerPockets.
Amir: They’re really good. Especially, let’s say, if you finish the book and you got some little niche questions, there’s a lot of support on there, and you could talk in the chat rooms and things like that. There’s even advanced topics. They’re pretty good with talking about some advanced topics too, like 1031 exchange for tax deferral and things like that.
Jen: Absolutely. We’re referring to biggerpockets.com, which is a real estate website and has a lot of basic information for people who are trying to educate themselves to get started. Well, we’re definitely going to need to talk again I think in the future. One thing that you do have, which I think people would be very interested in hearing about as well, is your summit. Can you tell us about that?
Amir: I’m on Facebook, a lot of people are Facebook, and we go on these physician Facebook groups. I just see a lot of people talking about the same things. But when I talk to my friends that have net worth over $100 million, some of them even have over a billion-dollar net worth, they don’t do any of that. That’s actually not how people become really wealthy. Nobody’s driving a Lambo and thinking they’re Vanguard fund. You know what I mean? So, how do these people do it? It has a lot to do with businesses and finding better risk-adjusted returns. Instead of interviewing a bunch of doctors, although I did interview some that I felt were in the top of their game, but we interviewed hedge fund managers, people that manage money for ultra-high net worth people, people that are really experts in their field when it comes to private equity, probably half a dozen of these people manage over half a billion dollars assets under management as some type of manager in either crypto, real estate, private equity. So, let’s just hear from those guys how to get involved and why that should be part of your portfolio.
That’s what the Wealth Strategies is. It’s five days. First day is on psychology of investing. If you don’t have the right mindset, you’re not going anywhere. Day two is all real estate. Why? It should be the biggest part of your investment portfolio, so we dedicate a whole day to that. Day three is alternative investments. A lot of things you haven’t heard of like for example, investing in life settlements. You can buy somebody’s million-dollar life insurance policy for 100 grand. When they pass away, you’re the beneficiary. We talked about that. We also have an asset protection day. The fifth day is like a grab bag, where we talked about either side gigs, marriage and money, how to put cash-based services into your clinic. That’s kind of a grab bag date. That was it. A lot of people liked it. We’re probably going to do another one too.
Jen: You’ve got a recording of the Wealth Strategy Summit that is available to people who are interested. Is that true?
Amir: Right. Just recently, we put the recordings up on board, so people can grab that. If you’d like to put a link on your website, we could get them some discounts on that. It is really awesome. You’re never going to find this in any medical school book or any Facebook post. The only way you’re going to get this knowledge from the streets or being in the investment banking world. But I think it’s a great summit, and there’s really nothing like it out there that I’ve seen. So, if you’re interested in that, then I’m sure, Jen, you could show them where they could find that.
Jen: Absolutely. We will link to it in the show notes. Thank you. Yeah, that’s fantastic. I appreciate you offering a discount to the DocWorking listeners.
Amir: No problem.
Jen: We’ve touched on a number of different things, and we’ve really just barely scratched the surface, a host of topics that relate to financial independence, wealth building, and having side incomes as a practicing physician, options that include giving you different ways to practice, giving you the freedom to practice because you want to, not because you have to. We didn’t touch at all on physician debt and how that plays into burnout and how that plays into physicians feeling that they don’t have other options. But I think that creating side streams of income can be a way for physicians to gain that freedom to go back to practicing the way they really intended to do when they first decided to go to medical school. I love what you’re doing. I love also that you have been so successful, and that you have advice as a mentor, and have provided access to other mentors and other people who have been extremely successful for us to learn from. So, thank you for coming on the podcast and I definitely look forward to talking with you in depth on a number of these topics in the future.
Amir: Yeah, sounds good to me. Thanks for having me on here, and hopefully all your viewers and listeners will enjoy what we got today.
Jen: Thank you so much, and thank you for being with us today on DocWorking: The Whole Physician Podcast.
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Amanda: Hello, and thank you for listening. This is Amanda Taran. I’m the producer of the DocWorking Podcast. If you enjoyed our podcast, please like and subscribe. We would also love it if you check out our website, which is docworking.com. You can also find us on YouTube, Facebook, Twitter and on Instagram. On Instagram. We are @docworking1 and that is with the number one. When you check us out on social, please let us know what you would like to hear on the podcast. Your feedback really means a lot to us. If you’re a physician with a story you’d like to tell, please reach out to me at [email protected] to apply to be on the podcast. Thank you, again, and we look forward to talking with you on the next episode of DocWorking: The Whole Physician Podcast.
