Physician Side Hustles

[pgg]

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Thats true, so he probably did beat traditional investing. but again you have to account for all expenses. Time spent (as an anesthesiologist who prob makes 2k/day), taxes, fees when selling. When you take all that into account, and also take into account historical returns and not outliers like the last few years then the math may not always favor RE

It's not just expenses, but risk.

Real estate investing is all about leverage. When times are good the profits are amplified. Invest $180K and borrow $720K - if the underlying $900K asset goes to $1.5M your $180K turns into $780K (roughly). Nice! It works great if the asset appreciates. But it only has drop a little before your invested dollars evaporate and you're left with debt and a relatively illiquid asset.

It's been nearly 20 years since the last significant real estate crash. Historically, RE roughly tracks inflation. There are wins to be had, but they are not assured.

Doctors, especially those in higher paid specialties, if they have some discipline and don't blow their money on toys, are in a great position to invest in high risk, high reward ways. If they miss, oh well, they'll still be fine in the grand scheme of things. They have years if not decades to recover. But a hit or two can be life changing. I would never discourage a young physician from investing aggressively and looking for those bigger wins.

What annoys me about these threads are the people who've never lived through a down market in any sector, who think success is a sure thing, or easy.

 

[TeslaCoil]

Even in your two scenarios, if you had invested in total stock market you would have gotten similar returns though. once you take into account labor and all expenses

I dont know what math you used there but. Not by my math at all. Started with $0. Bought a home with a zero down physician loan. Put 100k into it and nearly 5x’ed my 100k investment after I sold.

 

[TeslaCoil]

I have a buddy that owns a successful non-chain restaurant that’s been open a few decades.

The small family restaurant industry (maybe all small businesses tbh) is apparently pretty rampant in tax fraud, prison labor, undocumented workers etc. which helps make it worthwhile but doesn’t really seem like a thing most docs would want to get entangled with.

Its a very risky line of business and requires one to be very very hands on. My fam has been in the food business before. I wouldnt recommend food and bev to anyone.

 

[pgg]

I dont know what math you used there but. Not by my math at all. Started with $0. Bought a home with a zero down physician loan. Put 100k into it and nearly 5x’ed my 100k investment after I sold.

Leverage.

And risk.

When it works, it works great.

 

[Splenda88]

Thats true, so he probably did beat traditional investing. but again you have to account for all expenses. Time spent (as an anesthesiologist who prob makes 2k/day), taxes, fees when selling. When you take all that into account, and also take into account historical returns and not outliers like the last few years then the math may not always favor RE

You should also take into account tax saving.

 

[dozitgetchahi]

Alright lets hear it. Hows everybody generating multiple income streams? I have some real estate Im renting out. Other than that general investments. Looking for ways to generate more side streams of income. Anybody care to share ideas?

When I lived in Alabama, I bought an “undesirable” acre of land for very cheap ($5000). I knocked out a lot of brush and trees and set up electricity and water hookups for RVs. I put it out on Airbnb as an RV camping rental. It’s been profitable, and it didn’t take that much effort to do.

 

[dozitgetchahi]

Its a very risky line of business and requires one to be very very hands on. My fam has been in the food business before. I wouldnt recommend food and bev to anyone.

Slim margins, LOTS of time and energy that go into it. Owning/running (even if you’re not actually cooking) a restaurant is a lifestyle that is possibly even worse than being a resident. And the payoff is often nonexistent.

 

[emergentmd]

What's the business that generates so much revenue with such little time invested?

I took a huge risk starting medical offices that took a good amount of time but we have all of the infrastructure/people in place. There are days/weeks that requires some more work but it balances out by weeks that there is nothing much to do.

My post and I knew it would ruffle some feathers, is to push docs to use their big shovels bc there are lots of potential. Nothing wrong with working til 60 making 4-600K/yr saving 100-200k/yr in the market. They will do well.

But if you want to work less earlier or even get out of medicine earlier, then there are more places to use that shovel.

 

[<(^_^)>]

Real estate worked great when you could buy a house for 500k with 100k down, mortgage + taxes of 2k, and rent it for 3k. If it appreciated 3% you’re at 15k appreciation + ~3k after maintenance/fees, and you built equity of 12k a year too. So 30% return on initial $$ year 1. + tax advantages.

Problem is same house today isn’t appreciating and may be falling, and it is now starting at 700k with rates at 7% and rent barely increased. So 40% more down, 0 appreciation, and you’re cash flow negative.

Whether real estate is a good investment depends strongly on interest rates and your local market.

In the Bay Area a lot of people are renting out their 4M dollar house for 10k a month when the mortgage would be 30k, just because they don’t want to pay >1M in taxes if they sold instead. They’re going to pass it on to their kids tax free. As a result it’s an incredibly stupid market to buy in because you’re competing with people that essentially are prevented from selling their homes due to tax burden.

In other markets real estate can be good though, and with 3% mortgage rates most of America would be good again. Right now it’s disastrous unless 100% bonus depreciation for Airbnb comes back in 2026.

For vast majority of docs just shoveling money into SPY is the best bet. If you want to be aggressive QQQ. If you want to be very aggressive and you’re early in career and you have verifiable balls of steel (aka you know you won’t chicken out) consider leveraged funds, especially if p/e ever declines to reasonable levels.

 

[kidthor]

Anyone investing in anything international? It seems like investing in AirBNBs or hotels in some cities could make sense, but the logistics and uncertainty involved make it too sketchy for me for now….

 

[DesiredMemberName?]

For vast majority of docs just shoveling money into SPY is the best bet. If you want to be aggressive QQQ. If you want to be very aggressive and you’re early in career and you have verifiable balls of steel (aka you know you won’t chicken out) consider leveraged funds, especially if p/e ever declines to reasonable levels.

Agree with most of what you said, but one point about leveraged funds:

It’s generally not recommended to hold leveraged ETFs for the long term if that’s what you mean by “you won’t chicken out.”

Volatility decay can significantly erode returns over longer holding periods, potentially causing the ETF to underperform the underlying index, even if the index is trending upwards.

 

[<(^_^)>]

Agree with most of what you said, but one point about leveraged funds:

It’s generally not recommended to hold leveraged ETFs for the long term if that’s what you mean by “you won’t chicken out.”

Volatility decay can significantly erode returns over longer holding periods, potentially causing the ETF to underperform the underlying index, even if the index is trending upwards.

Volatility decay exists, but really is trivial compared to regular movements of leveraged funds. The real reason to not hold leveraged funds without rebalancing is how horrendous they do in a downturn, not them returning -2% YTD when the index is up 4.5% YTD. TQQQ would have basically gone to nothing during dot com (99.9% draw down) that’s the real risk. That’s why strategies like 50% TQQQ/50% cash with annual rebalancing exist. Overall leverage ratio is 1.5, close to optimal. (Optimal is 1.4-1.8 depending on time period).

Not something to be done toward the end of your career and probably not something to be done by 97% of physicians, but if you’re a finance geek early in your career it’s not a horrible idea if valuations return to a somewhat reasonable level.

 

[Status Sciaticus]

To get to those returns consistently, one would need $10-15mil already invested. Even if they lose a few million in a bad year, they don’t necessarily have to cut back.

I meant he is making 450 from job and 450 from market on average so a total of 900 if you count both. he plans for 5 years more full time and then start PT at 50 yo for 5 years and if market continues doing well it might be 1-2 days a week for cognitive stimulation and structure of some sort.

So he was making 450k annually in dividend distributions or dividend + share value?