There Were Losses

Raised On Frugality

 

There Were Losses

Winning! Killin it!  The back slaps and shoulder pats abound.  Although there has been a push towards transparency in the personal finance blogging space, the overwhelming flow of words and posts is strikingly positive.  Peruse the comments of any popular PF blog and it’s easy to feel, how shall I say, inadequate.  While I laud the collegial community such optimism has brought about, I sometimes wonder if those that put words on the screen have set impossibly high standards.  While I can’t speak for the tone and content of others, I can certainly share my own experiences.  There were losses.  Big losses.  Epic fails and silly dalliances.

I have made several major mistakes in this path to financial independence.  The point, of course, is that perfect is the enemy of good and making three rights will eventually take you to the left.  You can be flawed and still end up a seven-figure failure like me.

So fellow travelers, let’s take a walk down memory lane and see Doc G at his less than stellar moments.

I think my pride can handle it.

The Fellowship That Never Was

I’m an academic at heart.  I love universities, and teaching hospitals, and the pomp and circumstance of didactic learning.  When I started my training in Internal Medicine, I began to narrow my career choices among subspecialties.  Not only did this fulfill my learning goals, it was by far the more financially prosperous pathway.  General doctors do fine, but subspecialty medicine is where the real money is made.

I decided on pulmonary/critical care.  This field, I reasoned,  would train me to treat the sickest and most in need.  I took all the important electives, and secured a glowing letter of recommendation from a well-known expert.  I had all the ducks in order.

And then it happened.  One fated night in the ICU, a night that still jars me today.

I lost a patient unexpectedly.

I was a second year resident, alone and on call in an empty room full of deathly ill patients.  The guilt and sadness were overwhelming.

When the sun rose the next morning, I emerged a different person.  It would take years to undo the scars and pain of that single night.  I recovered, for the most part.  But my dreams of becoming a pulmonary/critical care specialist were gone.

Devastated by what I felt, at the time, was a personal shortcoming, I couldn’t spend the rest of my career locked away in some intensive care unit reliving my past failure.

I pulled every application, tore up my recommendations, and decided to become a generalist instead.

There were losses.  Emotional Losses

There Were Losses

Investing For Dummies

One day, in 1999, I walked into a Fidelity investment house, threw down a check for $100,000 and waited with a dum grin on my face.  The clerk ushered me back to an advisor.  He looked like he had just graduated college.  He quickly split my money into the greatest expense-ratio bearing, johnny-come-lately, dot-com funds.  If the term technology was somewhere in the prospectus, you better believe that I owned it.

The asset allocation was all wrong, the expenses were too high, and when the bubble crashed, I racked up five-figure capital losses.  Capital losses that I am still claiming on my tax return today 18 years later.

I put less thought into choosing an investment advisor than I did buying a pair of gym shoes.  And I paid for it.  I’m still paying for it.

Not my best moment.

There were losses .  Financial losses.

Owner of Nothing

I fancy myself a businessman.  I take pride in my ability to build and create new ventures.  Ultimately, the measure of success of any business is the bottom line.  How much did you make?  Most of the businesses I have postulated or even tried to build have led to nothing.  Zip.  Zilch.  Zero.  Sometimes I even lost money.

A bunch of years ago I started a business providing online advocacy for patients and families undergoing medical crises.  I spent five thousand dollars to hire a designer and create a web site.  I spent time and money marketing the idea, man hours applying for medical licenses in other states, and cash working with a lawyer.

Six months later, I had a brilliant idea, a beautiful website, and not a single customer.  My venture failed.  Spectacularly.  My lack of success wasn’t do to the product, or even the market.  It was my fault.  I couldn’t covert my ideas into a rational game plan.

There were losses.  Losses of pride.

In Conclusion

I want to make this clear to anyone who has been kind enough to grace this blog.  When I write about my success in investing, real estate, or business, realize that I am celebrating the wins.  There were losses too.

Losses that I regret from time to time.

Losses that were necessary.

 

Doc G

A doctor who discovered the FI community but still struggling with RE.

You may also like...

18 Responses

  1. Yeah, we tend to skip the losing stories. My very first investment outside of my 401K was a dot com stock called UBET. It even sounds like a scam. A business for online horse racing, I had a double bet going in early 1999. I bought $3000 worth at $20 per share and was lucky to get out at $4. I had no analysis of the financials, no moat. The failure was good for me though. The start of a lifetime of learning about investing. A cheap education I think?

  2. BucketBabe says:

    I tend to follow the bloggers who made mistakes and have stories of redemption and re-invention. I guess I have a personal bias since that’s my story. Blogs that reveal the “failures” and “walking thru fire” moments are so much more compelling and informative. It’s incredibly valuable to others to share these stories although I know that it’s much more fun to share the wins. 🙂

    I don’t have any bad investment stories other than in personal relationships and not always the best choices (thankfully OVER with) which, to be honest, did cost me a whole lot of dinero and grief in the end. It also caused me to get a late start on the FIRE path so the lost compounding over time… An education for sure, and not so cheap as it turned out. Those difficulties and circumstances turned me into a ninja when it came to embracing FIRE though. I think we are all ninjas with our personal stories of redemption and growth.

    • Doc G says:

      I like how you put it. If these mistakes can turn us into the “Ninjas” we are supposed to be, they are well worth it!

  3. Thanks for keeping it real DocG. I respect that you took chances, had some losses but got back up. Losing a patient can be devastating, especially to a young impressionable resident. I had a bad incident as an intern that scarred me. I still think about it nearly two decades later. I appreciate your transparency.

  4. We’ve all failed. Anyone who hasn’t is either hiding something, lying,or in denial. I did a failure post regarding climbing, but have some coming up that are financial. It is important to let readers know that we are just as (or more) prone to failure as anyone.

  5. Gasem says:

    I came to understand some people come to the ICU to recover and some come to expire. In those cases your power is limited.

    I have been in and out of several businesses and now I’m completely retired. What’s your perspective on tax management of your pre-tax accounts?

    • Doc G says:

      Hey Gasem. I agree about the ICU. Sometimes it is just out of our hands.

      My perspective on tax management on pretax accounts? I try to pay as little as possible!

      1)I donate heavily appreciated equities.
      2)I shoot for tax efficient index funds
      3)I hold all bonds except Municipals in tax protected accounts
      4)I will being doing more back door Roth’s in the future.
      5)I’m not a big dividend investor. I don’t avoid them, but don’t search them out either.
      6)Post tax money sometimes is put into real estate and profits are offset by depreciation.

      Is that what you are looking for?

  6. Gasem says:

    I was thinking more about how you’re going to manage RMD. I think you have about 2M in pretax and 2m in post tax and 2M in RE so between RMD SS and RE the taxes are bad. It’s even worse if a spouse dies and you/she becomes a single payer. I’m dealing with Roth conversions to give me some control once RMD hits but your clearly forward thinking and I was wondering your analysis. You may be still in the accumulation mindset and haven’t spent much time in analysis. Deflating the portfolio efficiently is actually more complicated than it seems, so I’m always on the lookout for people who know more than I do. Thanks for your response and I love your URL name.

    • Doc G says:

      So I have thought about it a little but not deeply.

      1)Once I stop working roll tax deferred into an IRA and convert as much as I can to the Roth space without worsening tax burden.
      2)(Half in jest) Move into my rental properties (all in great areas) and live in each for two years before selling!
      3)Gift to my children and hopefully grandchildren
      4)Donate
      5)Pay what is required

  7. Mr. PIE says:

    Enjoyed reading this DocG. Bravo!

    I recall hearing this phrase from a mentor after a tough session in front of a bunch of execs at my company: “Experience is what you get when you don’t get what what you want”. It applies to so much of what we learn, our growth, our challenges, our shortcomings.

    We never stop learning, do we?

    Thanks for being honest about your losses.

    Best,

    Another Seven Figure Failure

  8. Doc G,
    Love your domain – clever! Losses are tough, but they define us. Thanks for being transparent, and also for helping me put my losses in perspective.

    • Doc G says:

      We all make mistakes, fail, and get embarrassed. Having a community, like we do, where we talk about these things is so helpful.

  9. Awww I can so relate. It’s OK buddy!!
    “Most of the businesses I have postulated or even tried to build have led to nothing. Zip. Zilch. Zero. Sometimes I even lost money.”
    I’ve lost a lot before. And I feel so bad. But I don’t think you’ve stopped and I don’t think I’ll stop 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.