So, I'm going to talk about the program basics, what is PSLF, and what the normal typical rules are. I'll talk about some changes and updates, including temporary and permanent ones, and then lessons learned along the way. So, what is the PSLF program? This was started in 2007, and under normal rules, you need to make 120 qualifying monthly payments, and I'll explain what qualifying means. And at the end of that, whatever remaining principle and interest you have, regardless of the amount, will get completely forgiven. These 120 payments don't need to be consecutive, so you can take a break midway through if need be. And these payments are based purely on your income. So, again, totally unrelated to the amount you borrowed, but rather on how much money you make. You need to work for what's called a qualifying employer, and again, I'll get into that in just a moment. You have to be working full-time by their definition, which is at least 30 hours a week. So, what is this qualifying mean? So, there are three main rules to be aware of. You need to have the correct loan type, you need to be on the correct repayment plan, and you need to be working for the correct employer type. So, the first of those three things is the correct loan type. So, what that means is in order to get public loan forgiveness, you need to have your loans as a type of loan called direct loans. They're a type of federal loan issued by the federal government in the U.S. There are other types of federal loans, including Perkins and FFEL, which do not qualify for this program. However, you can undergo a process called consolidation, which essentially turns them into direct loans. However, if you consolidate under normal rules, this will start your 120 payment counter starting at zero. So, if you've already been making payments on your FFEL loans, and then you consolidate, you're going to be starting again at zero, with an exception that I'll get into later. If you have private loans, whether you borrowed privately initially or you refinanced your previously held federal loans, these do not qualify and you cannot participate in this program. You also cannot consolidate into direct loans. So, there are two entities to be aware of. The Department of Education, which manages the student aid program, is the one that actually holds your loans. They're the ones who loan you the money and they're the ones who, at the end of the 120 payments, will give you your forgiveness. So, you can go to their website and get a bunch of information there about how this program works. Mela is a company to be aware of. That's the loan servicer. So, they are a private company and they contract with the government and they do everything in between. So, they issue your statements, you send your payments to them, any communication or questions that you have, go through them. But ultimately, your loans are forgiven by the Department of Education. Previously, there was a company called FedLoans that did this. They no longer do. They no longer exist. Okay. So, that was the first of the three requirements for this program, the correct type of loans. The second requirement is you need to be on the correct type of repayment plan. So, there is a category of repayment plans called income-driven repayment. This is an umbrella term and it includes one subtype called the save plan or saving on a valuable education. This is new as of this year and the government is heavily pushing trying to get everyone into this plan. I don't have time to get into the specifics of these different IDR plans. You can find those online. But this is the one that they're pushing that will be really helpful for a lot of people because it doesn't...or more interest doesn't accrue. But it might not be the best plan for everyone. This is taking place of a plan that was called repay and that is being phased out. The other three types of IDR plans, again, I don't have time to get into. They have some differences among them, but you can go online and learn more about them if you're interested. But basically, you need to be on one of these four types of repayment plans in order for your payments to qualify for loan forgiveness. There is something called the 10-year standard repayment plan. Technically, this would qualify as well, but this is calculated out in a different way. So rather than being an income-driven repayment plan, this just takes whatever you owe and then spreads it out over 10 years of payments. So if you made 10 years of payments, you would be at a balance of zero. So you would have nothing left to forgive. So this might...if you, for some reason, are in a 10-year standard repayment plan for a short period of time, that's fine. It would qualify, but there'd be no use to doing it for 10 years because there wouldn't be anything left to forgive. Just be aware there is something else with a very similar name, which is quite confusing, something simply called the standard repayment plan. This is not the same thing and it won't qualify. These are payment plans that would span between 10 to 30 years. So just be aware if you're hunting around on the website, these are two different things. This is just a screenshot from the student aid website showing those four types of IDR plans, income-driven repayment plans, where you can learn a lot more about it. And there's another section that's very helpful. So if you're exploring whether PSLF might be right for you, this is one place you want to visit. It's called the Loan Simulator Tool. On there, you can go and plug in your personal financial information and figure out which of these repayment plans might be best for you. Remember, your monthly payments are purely based on your income, and then whatever's left over at the end of 120 payments gets forgiven. So it behooves you to find the plan that gives you the lowest payment possible every month. There is no point in paying off more, trying to pay ahead with a larger amount each month, because you're just paying... If you lower your balance, there's less to be forgiven. So you're better off having the lowest monthly payment possible. All right, now the third thing that I mentioned that is part of the rules of this program. You have to work for the right type of employer. That means a qualifying public service organization, which basically means a non-profit. Most academic hospitals count. Most training institutions count. So if you're in a training program, such as with radiology, where you're going to be training for a minimum of five years, and then maybe another year or two in fellowship, many of those 120 payments will happen during your training years, where your income is relatively low, and so therefore, your payments will be relatively low. You do have to be employed by the institution. So if you work at a non-profit, but you are contracted through a private company, generally that will not count. You have to be employed directly by them. There is a new rule that came into effect this year for the states of California and Texas, because they have state laws that do not allow physicians to work directly for non-profits. So starting this year, that has changed. For-profit institutions do not qualify. Okay. So everything I just mentioned can be wrapped up in this slide. You need to make 120 qualifying monthly payments, as long as you have these three things in place. The right type of loan, direct loans, the right type of repayment plan, an IDR plan, and the right type of employer, a non-profit. Okay. So who should participate in PSLF? Well, basically, if you're a person with a high debt-to-income ratio, meaning you've got a lot of debt, but not a whole lot of income, this is going to benefit you. This is particularly true of residents and trainees, as I mentioned, and even for attendings who might be earlier in their career or maybe deferred their loans in training. There's another portion of the student aid website that's very useful, called the Help Tool, and this is basically where you want to get started. Again, if you're exploring this as a possibility, this is where you start. You learn what type of paperwork you need to fill out and everything you need to do. So if you remember nothing else, try starting here. There are a number of online calculators that you can use if you want to, in addition to the loan simulator tool that I mentioned, where you can try and figure out if you're not sure if PSLF makes sense for you. This is a screenshot from the White Coat Investor website. This is just showing, with color coding, if this might make sense for you. So for example, if you have a loan of $100,000 outstanding and you make $400,000 a year, you fall into the dark blue bar category where not only does it not make sense, but loan forgiveness is not possible because you will have paid it off before the 120 payments is up. On the other hand, if you have $485,000 in loans and you make $150,000 a year, then the light blue bar says you should definitely participate in this program because in the long run, you will pay far less over those 120 payments than if you tried to pay off the loan itself. A couple of changes and updates to be aware of. The loan servicer, as I mentioned, is called Mela. It's no longer Fed Loans. There was a payment pause during COVID, which is now over, so nothing to know except that it's over now, so it doesn't apply. There was also a temporary waiver that expired last year where many of the rules that I mentioned, the fined aspects of the rules were made more flexible to allow more people to get credit for PSLF who normally would not have. That is also over, but there is one last chance that is about to happen, something called the one-time IDR adjustment, which is going to happen at the end of this calendar year, so in about a month, and there are many similar features as the waiver that happened last year, but basically, people who might not have otherwise qualified for PSLF may be able to qualify. This includes people who have other types of loans that are not direct loans. As I mentioned several slides ago, if you have, for example, FFEL loans and you consolidated, you would lose any credit that you made already on past payments. This adjustment gets around that, so let's say you've paid down towards your FFEL loans for five years, and then you consolidate into direct loans, you can get credit for those five years you've already paid, so this is the one to be aware of right now. As of now, that's the one-time account adjustment that is going to happen very soon. You can also consolidate multiple loans if you have them, so if you have multiple direct loans, but they are at different payment counts, if you consolidate, you can turn them into one big loan at the highest payment count, so you'll get forgiven sooner. Some additional permanent changes that went into effect this year basically allows certain types of forbearance and deferment periods to count towards PSLF but wouldn't normally, and after this one-time account adjustment is over, if you consolidate and you have loans with different counts, you can get a weighted average as opposed to the highest count like during this temporary adjustment. Another new thing is 30 hours is now considered full-time, no matter what your employer defines it as, and like I mentioned, private employees in Texas and California can now get credit. So what have I learned? Very briefly, things to know. So there is paperwork to fill out. I'll just say that there's a form called the Employment Certification Form. This proves that you are working for a qualifying employer. That's combined with a forgiveness application, and then there's an Annual Recertification Form, and this is to prove what your income is so that your monthly payment amount can be determined. The ECF, you can do whenever you want, but most would recommend doing it annually just to stay on top of things, but the annual recertification must be done annually, otherwise you're going to lose out on payments counting towards your 120. Don't forget, at the end of your 120 payments, you don't automatically get forgiveness. You actually have to send in an application to get your forgiveness. Keep careful records, whether you like paper records and color-coded binders or keep them digitally. Information can get lost, especially because there are a lot of changes going on. Mela, the company, is quite overwhelmed at the moment. There are a lot of stories floating out there of information getting lost, so just do your part to keep track of everything you can on your end. Very briefly, I'll just mention there are alternatives to this PSLF program to get loans forgiven. Not all of them, if any of them, will give you complete loan forgiveness, but might be options if PSLF is not an option for you. Several of them are through state or federal governmental agencies. Remember, PSLF is not necessarily for everyone, but if you do decide to do it, educate yourself as much as you possibly can. Remember the three things I told you, right type of loan, right type of repayment plan, right type of employer, and there are changes that have gone into effect, some of which are permanent, all for the better. This is my email at the top if you want to email me with any questions, and then a number of useful resources as well. Thanks very much. Thank you for the invitation to speak today. I'm going to be talking about investing 101, some basic principles. It's a little difficult to get all this into a 10 to 15 minute talk, but hopefully this will just get you guys excited to learn more about personal finance. How did I initially get started learning about personal finance? I honestly had zero interest in personal finance throughout residency, throughout most of my fellowship. Towards the end of my fellowship, my in-laws had decided to gift us $30,000 to put into our two daughters' 529 plans, which at the time was a ton of money for us. It was a lot of money for my in-laws, and we didn't really know where to start, my wife and I, and so we initially just went to their financial planner to hopefully help us out, decide what's the best approach with this money. We were a little surprised after we deposited $30,000 when we got that first statement back to find out that almost $2,000 of it was gone in the form of fees or commissions, or what I later learned was a front-end load. Instead of the $30,000 being invested, we had about $28,000 invested. Honestly, it got me fired up about this to learn that I was essentially taken advantage of, and thankfully it was a small amount of money, but I'm sure a lot of people in this room have probably been taken advantage of during their life by a financial planner, or someone kind of masquerading as a financial planner. And so when we think about money, money in general, I think we probably all understand this. We do some sort of service, or have some sort of job, or own a business that earns some money. Ideally, we try to spend less than we earn. We take that excess to invest, or we pay down our debts, and then hopefully we grow our portfolios so that by the time we reach retirement, we're able to retire with dignity. However, when you actually survey late-career physicians, this was a survey of 400 late-career physicians asking them, why do they still practice medicine beyond the age of 65? There are a lot of good reasons here. So 58% enjoyed the practice of medicine. 56% enjoyed the social aspects. However, half of the respondents said they still practiced to maintain their existing lifestyle, meaning that they hadn't saved enough to actually retire with dignity. And so why is that? And so over the last decade, I've kind of, after reading a lot, after kind of experimenting a lot, I've kind of boiled it down to these four different rules that I hold for investing. And if you do these four things, I think you'll probably be successful with investing. Rule number one is if you decide to invest in individual stocks, try to limit it to a small percentage of your portfolio. You definitely don't have to invest in individual stocks, and you're probably better off if you don't. But if you need to, or you have the desire to, try to limit it to a small percentage of your portfolio. Two is invest mainly in bond and stock index mutual funds, not actively managed funds. Three is pick a reasonable, easy asset allocation and stick to it. Don't adjust on the fly. And then four, probably one of the most important thing is try to invest at least 20% of your gross income for retirement. And the earlier you start, the better. And so what can we actually invest in as radiologists? And so we have a lot of different investment options that are available to us. Money market funds are now giving, you know, a higher percentage than they have over a decade. You can invest in individual stocks or bonds, stock or bond mutual funds, real estate, or as a radiologist, often we can invest in the radiology business or an imaging center. And so for the purposes of time, I'm really going to focus on individual stocks and bonds and then stock or bond mutual funds. And so why do I say if you're going to invest in individual stocks, try to limit it to a small percentage of your portfolio? So what are the risks of individual stock or bond investing? So many may remember Enron, a pretty prominent company that was doing really well in early 2000. Over the course of 15 months, the stock price in the company essentially went bankrupt. And what happened for a lot of people, a lot of the workers of Enron held all of their retirement assets in Enron stock. And this is pretty common. I have a sister-in-law that works at Microsoft. A lot of her payments, a lot of her bonuses are in the form of Microsoft stock. And so their portfolio is very heavily Microsoft stock. And so the bad thing about this was not only did their entire retirement go to zero, but they also lost their job at the same time. And this is one of the biggest problems with individual stock investing, is you cannot really predict when a company may be taken over or a new company comes along that displaces the other company. Now, we all know kind of the joys of individual stock investing. If you were one of the lucky few to invest in Amazon or Netflix early on, right after they came to market, you'd have made a ton of money. Not surprisingly, this tends to go in waves. And one of the key things is think back 30 years. Think about those prominent companies that may have been around in your childhood or earlier, and try to decide, are those same companies the big companies that we think of today? And so 30 years from now, I'm not sure there will be an Amazon stock or a Netflix stock. Who knows what the next innovator is going to be? And so that kind of brings me to rule number one. If you do decide to invest in individual stocks, try to limit it to a small percentage of your portfolio. You definitely don't have to invest in individual stocks to be successful. So if you actually shouldn't invest in individual stocks or bonds, what should you invest in? And this is where kind of the meat of the talk comes into play. And so I'm going to be talking about mutual funds and exchange traded funds. And there are some differences between these two terms. However, for the purposes of this talk, I'm essentially going to consider them more or less equal. And so what a mutual fund is, it's an investment vehicle. Imagine we took everyone's money from this room and we decided to invest in various securities, either a collection of stocks or a collection of bonds. And there are generally two different types of mutual funds. So actively managed funds and index funds. So with an actively managed mutual fund, the person in charge of that fund is going to try to pick the winners and avoid the losers. And so they're going to try to figure out which stocks or which bonds they think are going to outperform and which aren't going to do well. And they basically try to buy those that are going to outperform or they think they will outperform. These come in two different flavors, a loaded fund and a non-loaded fund. And then an index or a passively managed fund, rather than trying to figure out which is going to be the Amazon, the Tesla, the Netflix, they're just going to buy everything in that particular index. Kind of weight it to how big the company actually is. And so whatever the index is doing, whatever the market is doing, those will be your returns. And so the most kind of well-known index funds that you guys have probably all heard about would be the Dow Jones Industrial Average, the really prominent companies in the United States, or the S&P 500, which is 500 of the largest companies in the United States. And again, with an index or a passive fund, the managers are hands-off. They're not buying and selling. They're basically buying whatever is in the index. And so you're going to have the Tesla, the Microsoft, the Apple, but you're also going to have the new company that comes in and displaces Apple. There are a few different fees I want everyone to be aware of with mutual funds. The first is a load. And the way to think about a load is essentially a commission for being able to buy that particular fund. And so this is what I fell into with our Kids 529, the story that I told at the start of this talk. What I didn't realize is we were being put into a loaded mutual fund. And so in order to actually invest in that fund, we had to give five to six percent of the total money that we actually gave to get into that fund. An expense ratio is how much it costs to actually run that fund. As you can imagine, an index fund is very hands-off, so it doesn't have many expenses compared to that actively managed fund where they're buying and selling, doing a lot of research on various companies. So you may wonder, how can I figure out what fees I am, what fees I have for what I'm actually invested in? So if you know what you're invested in, in this case, the Vanguard Total Stock Market Index, each one of these is going to have a symbol associated with it. So for this, it's VTSAX. So if you put this into Google, you'll basically get a chart that looks like this. You can easily see the year-to-date return. You can look at returns over a longer time frame. You can see whether or not you were charged a commission to get into it, in this case, a front load. Because this is an index fund, it does not have a load. And you can also see the expense ratio here at the bottom. So in this case, you can see the expense ratio is almost zero percent, so 0.04 percent. Let's look at what I was actually invested in for my kids' 529 accounts. This American Funds, AMCAP, this is the symbol. So you can see that this has a commission to get into it, so this front load. It's almost 6 percent. Again, that's how much money of your total investment you have to pay before it even gets invested. And then the other thing to realize is, because this is an actively managed fund, the expense ratio is quite a bit higher, almost 1 percent. And so if you had to ask yourself, historically, which fund management is going to do better, are you going to do better if you actively try to figure out what are the winners and avoid the losers, or is it better just to do the index or the passive approach? And the truth is, the index funds almost always win. And so this is a chart looking at 20 years of actively managed equity funds. Fifty percent of them, of these actively managed funds, went out of business. Thirty-three percent underperformed the index. Eleven percent barely outperformed the index, and only 6 percent beat the index by 1 percent or more. And remember, for a lot of these actively managed funds, you have to pay a load or a commission to get into them. And then also, the ongoing expenses are quite a bit higher. So not only do you have to beat the index, but you have to beat the index by quite a bit. And it all comes down to the fees. And so why do index funds usually beat actively managed funds over the long term? It's due to these fees. And so looking at the index fund, you can see how much is in fees is in red versus the average actively managed fund in red here. So much higher fees. So not only does it have to beat the index fund, it has to beat it by quite a bit. And so what do the experts say? So Warren Buffett, probably the most well-known active investor of our time, he said that a low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor Ben Graham took this position many years ago, and everything I have seen since convinces me of its truth. Jack Bogle, the founder of Vanguard, of the 355 actively managed equity funds in 1970, 233 of those have gone out of business. Only 24 outpaced the index by more than 1% a year. It's really terrible odds trying to figure out which are going to outperform. And so this brings me to a really important rule that basically if you're going to invest, try to primarily invest in bond and stock index mutual funds. And again, I don't have time to go through all of this. Hopefully this talk has got you interested in it. Happy to take questions now, and I can give you some resources that can kind of take you to the next level. Thank you. I'm Sherwin Chan. I'm a radiologist at Children's Mercy Kansas City. So my objectives of the talk really are to talk about the economics of insurance, give you a guide on what kind of insurance to get and how much from my point of view. And then I think one of the most important concepts I want to get across to you in this talk is there's a concept of enough. And enough is where you have enough money to live comfortably for the rest of your life and create the legacy that you want. And again, once you get to enough, you can stop there. You don't really need to go beyond that. And that guides a lot of why I insure what I insure. So guiding principles. So how do you decide what to insure? You're offered insurance on all kinds of things. Personal injury, home, life, property, accident insurance, travel insurance. So which one of these are good purchases or financially savvy purchases? So really insurance always all comes down to risk and cost, right? What you're trying to do by insurance is you're trying to spread out the risk of a certain event happening to you where it's catastrophic. And you spread it out among hundreds of people. So if hundreds of people put into this pool of money, if that event happens to any one person, that pool of money will make that person whole. And that's why you buy insurance is to spread out risk. So again, if you look at two types of things, one is just small bumps in the road. And most of this you don't need to insure because, again, it's a small risk. It won't hurt you in the long run if you hit that bump in the road. It might be a little bit painful for a little while, but you'll be okay. But falling off a cliff, definitely want to insure for that. So let's take a look at examples of smaller types of insurance. One is cell phone insurance. It costs you $5 per month, $60 per year. It's not that much money, right? And the payout is a new phone. $600 these days is probably closer to $2,000 for some of the really fancy phones out there. What's the risk? The risk is you drop it. The risk is you get a brick. Or, heaven forbid, you drop it in the toilet. Are these insurance good bets? Why or why not? And so let's look at some of the data. And here's the data around those small insurance policies that you're often offered at Best Buy or Costco or by your phone company. Look at the payout on it. Basically, it's that same graph that Chris showed. How much is kept by the company? Well, 80% is kept by the company selling those warranties, and only 20% is paid out to the group of investors who's gone to split their risk. So again, product warranties in small areas of insurance like that, they're really losing bets. Whereas autos and homeowners, of course, it's not going to be 100%, right? If you put into this pool of money, they need to cost to administer the insurance. They need costs for the claims adjusters. They need to make sure that what you're asking for is fair. So they're going to take some off the top, but it's only about 33% that they take off the top, whereas it's 80% for these product warranties. So really think hard about those small insurance purchases, travel insurance, airfare insurance, all those little things that you're offered as add-ons for certain purchases. So that comes to rule number one for insurance. I really feel like if we're able to self-insure, we should self-insure because, again, we're not incurring any of that overhead. Now, let's look at the different types of personal insurance. So there's life insurance, disability insurance, and I really want to cover umbrella and liability insurance. So again, life insurance, what's the cost, what's the payout, what's the risk? There's two types. There's term insurance and there's whole life insurance. Term insurance, you generally buy. You buy it because you want it. Whole life insurance, a lot of times you're sold. Somebody's selling it to you because they want to make some money. Let's look at the cost difference. It's hugely different, right? This term insurance, 500 or so a year, easily affordable. Whole life insurance can get even higher. I'll give you an example later in the talk. Again, the payout's actually easy. So if you've passed, you get paid on your life insurance. So there's no ambiguity there. Now, how do you determine how much you need? Well, there's a famous study called the Trinity Study which determines how much money you need to save to have a certain guaranteed income in life. And that's basically you need to save about 25 times what you spend in a year. And that's generally my retirement savings goal and it should be your insurance goal as well because that's really enough. So let's take a case study. So for example, I'm radiology attending, about five years, married with three kids. No student loans at this point because we listened to Grace's talk early in our career. But I do have a mortgage, I do have some savings, and I spend this much a year. So according to that Trinity study, if you look, if I spend $150K per year, if I multiply it by 25, I get about $4 million. If I multiply it by 30, I get about $4.5 million. So that's the take of the $4.5 million because we want to be a little bit more conservative because we definitely don't want to go back to work. So here's enough, right? That's that blue line, $4.5 million here. And this is our savings. So in our first decade of work, we're around a million. Second decade, and so on, and so on, and so on. And so once your savings crosses your enough line, you really don't need insurance anymore, right? Insurance is just for this period here in your first few decades where you don't have enough money that if something were to happen to you, you would want your spouse and your surviving kids to be okay. So again, you really want that. And this is what Chris Walker taught me, laddering of insurance. So again, instead of buying one policy, so you could buy a $4 million policy to cover that $4 million shortfall, or you could buy a $2 million policy knowing that you'll save enough in 10 years to cover that $2 million, and then another policy there. The policies are cheaper, they'll fall off, and so this is a much better strategy to keep your insurance costs down. Rule number two, know what's enough. So whole life, here's an example. This is a true story of a friend of mine. He was 37-year-old, he had single, no dependents, he had a mortgage on a house which was relatively modest, no loans. He was approached by a financial advisor. He was sold a whole life policy. Again, this financial advisor knew he was rich. He knew he was making a really good salary. So he sold him one that was $4,000 a month. My friend paid it for a year, put 50K into this policy. After a year, he re-examined his priorities. He met a really nice lady in Kansas City. He got married. He really just wanted financial independence. He wanted to work less, and he's actually gone to part-time now because of being really intentional about his money. He cashed out his insurance. Sadly, it only gave him $15,000 from the 50K because, again, that whole life isn't really good for really short-term savings. It's good if you keep it for a long, long time. If he had done the S&P 500 instead and invested in term life, he would have had 48K. And that difference in retirement, that one change between buying that whole life policy and that term life policy ended up being...will end up being about half a million for him at his retirement. So again, think about whole life when you're sold this. Really remember, the premiums are really expensive. It's a mix of investment and life insurance. It really reduces your financial flexibility because you have to keep paying into this policy. It does eventually make sense, usually, in the long, long term. But again, that's when you have way more than enough, so you don't need that payoff at the end. And that's why it's suitable for very few radiologists. There may be some of you out there with disabled children or other recurring expenses after your death that you need more than enough, or your enough threshold is really high, where this might be suitable. But again, it's very rare. I want to talk a little bit about the hidden risks of insurance, and this is with all insurances, and it's really bankruptcy of the insurance company. So look at your insurance companies. They are rated. Here are four different rating agencies. Go check your insurance company. Make sure it's rated on the higher end because someone has gone to the trouble of assessing how much risk is in that insurance company, so you might as well use that assessment when you're buying policies. Again, the policies I'm recommending are fairly cheap, so please take the extra dollars and go with the better company. So rule number three is your insurance partner really matters. So again, for life insurance, I like the laddered term life policy from a good company, and I buy more if you think it's important. Disability insurance, I think this is really important because if you become disabled, you will want that payout. There's different types of disability insurance. This first one pays out if you can't do radiology, which is the kind I recommend. There's also one which pays out only if you can't be a doctor, and that's tougher because if you can do family practice, like if you hurt your eyes, it wouldn't pay out. So it would force you to go back into training to maintain your income. And again, there's some that if you're a lawyer, if you can still do lawyering stuff, it won't pay out. So those are the worst types of disability insurance. So think about your earning power for those of you who are young. Radiologists are paid really well these days, so this is your value as a person. This is your human capital, and that's what you're insuring for. So get own occupation, make sure the insurance company can't cancel it at their whim, and make sure it's guaranteed to be renewed. Get a big policy, and this is not a zero risk. So again, most people end up using this because of illness, and it's about one out of seven doctors. So just make sure you insure for this. The employer-provided insurance, here's a kind of special case for you. Check if it's a pre-tax deduction versus a post-tax deduction. Our employer actually offers that, and I almost always take the post-tax deduction because these premiums are really small, but then my payout is post-tax. And so that's a huge benefit. So if I'm getting paid out, let's say, $200,000 a year, all of that is post-tax. So that's probably equivalent to 300, 350K pre-tax. So if you do have this option, do it as a post-tax deduction for your employer-provided disability insurance. There's some special cases. Again, I always like self-insuring if you can. So if you are married to a neurosurgeon, that's great. You guys might be able to self-insure and not buy disability insurance because if one person becomes disabled, the other person can keep working. And the other one is for the interventional radiologists out there. A lot of the time, you can buy own occupation insurance as a resident, and they will put you in a lower class, so it will be cheaper, and it will still cover you. Just make sure with the policy, but it'll still cover you when you graduate to a higher class of interventional work. So just remember that if you're out there. Again, for personal insurance, car and home, the real big thing for all of us is liability. As doctors and especially radiologists, I often feel like I have a target on my back, and this is why you get umbrella insurance is if you're sued because of anything that happens in your home and car. The other thing about umbrella insurance that is good about buying a big policy is if you buy a big policy, the insurance company is on your side. Remember, the insurance company really gets to decide whether they settle the claim or not. And so if you have a half a million dollar umbrella insurance, they may just settle the claim for $3 million, and you might be responsible for the rest of it. But if you have a $3 million policy, they're not going to settle the claim. They won't want to pay out that $3 million. They would rather pay the lawyer fees. So again, get lots of umbrella insurance. And again, rule number four, similar to rule number one, self-insure. It's best for life-changing events. So again, as a recap, self-insure when you're able, know how much is enough, your insurance partner matters, and insurance is really best for those rare life-changing events. And thanks so much. Good afternoon, everyone. I'm the last speaker today, and I am going to talk about the best asset class to become financially independent and build generational wealth. Is there anyone interested in that? Hands up. Some people? Okay, all right. For the others, I don't know. Put your hand up if you own your home. Okay. Put your hand up if you own an investment rental property. Okay, a few of you. Great. Okay. Well, if you own your own home, you're among 66% of Americans. And if you own a rental property, anyone want to propose how many people in the United States own a rental property? Seven percent. Seven percent. And here I'm going to show you why it should be more. And amongst this group, I hope that I can convert some of you. My story, my husband and I are partners. We have been investing in rental properties for 20 years. Currently, we have about 30 units, and it's a mix of single-family and, in the last couple of years, more multi-family, which allowed us to scale a mix of long-term rentals as well as furnished rentals. And so this talk, I know definitely many of you may not be following this path, but this is a talk to show not so much how you do it, but why you should be investing in real estate. Here are my objectives. I'm going to explain why you should be investing in real estate, and in particular for radiologists, why this is an enormous advantage over other asset classes. And then I know we're radiologists, so we love cases, right? So I'm going to show you some cases from my own portfolio, which are really compelling to me about why people should be doing more of this. But let's start off with the major why. And the major why is wealth. Wealth is not about getting rich. That does not make me any happier, having more money in my bank account. It's what you do with the money, right? It's about having choices and having freedom. And here are two books that were really influential for me. One is The Four Quadrants by Robert Kiyosaki, who did Rich Dad, Poor Dad. And this made us actively increase our investment into real estate. He talks about active, part employed or self-employed, where you actually have to be working to make any money. If you have an accident, if you can't work for any reason, then you're not earning anything. And this part of my world is extremely fulfilling. I love working for Hopkins, and I love teaching and being in academics. But I definitely wanted more passive, because I wanted freedom. We wanted to have an option if we decided working wasn't good for us. And so this is being an investor and owning a business. And real estate investing, it really bridges the two. It's not entirely passive. There's no doubt about that. But you are building something for yourself. You are employing people, potentially, and you're making a beautiful environment for people. And then recently, what I read last month, highly recommend this one, Die With Zero by Bill Perkins, about not only accumulating wealth, but what you do with wealth and how you enhance your life with life experiences. Okay, so I know what everyone's thinking. Why would I not do just a Vanguard mutual fund, like Chris has explained? Why do I want to take on this headache of real estate? And so this is a slide that makes you think, well, definitely no. Because if we're just looking at metrics, I've got stocks on one side and real estate on the other side. And with every asset class, there's growth in that asset. And so there's growth in the S&P 500, which is 10.5% a year since the 1920s. And then there's growth in real estate, and that is also known as appreciation. And real estate for single-family homes, less than 4% in the last 25 years. The other aspect of investing is how much it pays out to you every year. In stocks, it's in the form of dividends. Stocks, about 2% to 5% per year based on the value of the stock. And in real estate, it's your rental income, and it's your income minus your expenses. And for real estate, it's 5% to 10% per year, and that's known as the cap rate. And I'm going to mention this term unleveraged, and it's because it's unleveraged that it makes it look unattractive. So if we weigh up the two, it's actually about the same, but you're taking a lot more responsibility, you're doing a lot more paperwork. Why not just click the button and invest in Vanguard? And that's what I did for most of my life as well. So here are the advantages for radiologists, and for everyone, Americans. There are many investors that are nurses, teachers, and they've built a portfolio and have financial freedom and generational wealth. The four main advantages that everyone talks about, number one, passive income and debt pay down. So after the tenant pays you, and after you take out the expenses, and even after you take out the mortgage, there is some income. And that tenant is also helping you pay off the mortgage. And I know as far as I last checked, there's no one paying me to...giving me Tesla stocks, but someone is paying off my house for me when I buy a rental property. The next thing is tax breaks and deductions. Who likes paying tax? Okay. Well, when I work for Hopkins, that tax is taken out before it ends up in my bank account. But if you own a rental property, there are a number of expenses, including travelling to Australia, which I'll be doing next month to visit my rental property. And so the airfare of that, as well as some meal expenses on the days that I see my property tax deducted. There's meals and entertainment. If I'm discussing real estate with my husband, just not all meals, but some meals. And then there are office expenses for having a home office to manage the rental properties. And then this is a big one that this government offers. This is depreciation expense. So every year, you are able to deduct depreciation on your property, and that can be over 27.5 years. So if you have a $27,000 property, you're able to deduct $10,000 a year. And then if you make any losses, you can carry that forward to the next year. And the two biggest advantages for you in this room that help to build wealth are appreciation, growth in your property, as well as leverage. And so let me explain leverage. Leverage is making your money work for you. And this is what it looks like. If you take a $100,000 bonus, say, from your employer, and you want to invest it in the mutual funds at Vanguard, you're buying $100,000 in mutual funds. But the beauty of leverage with real estate is that a bank is going to give you a loan. A bank isn't going to give you a loan to buy Tesla stocks or mutual funds, but a bank is going to give you a loan to buy a home, a rental property. And so for that $100,000, this is leverage. You can buy $500,000 in assets. And for each of these houses, the tenant is helping you pay off that equity and interest, and you may have a little bit on this side as well. And so that is leverage, and that is why you can really build wealth with real estate. And I know there are people that don't like debt. Chris and I were talking about it as we walked over here. He doesn't like debt. But this is good debt. This helps build your net worth, and it helps you generate income. And it's a very safe debt. Okay, so the recap on the advantages, I'm going to sum it up in tail. And this is my tail of these three cases. So the three main advantages, tax, appreciation, income, and leverage, and I'm going to show you those advantages in the next three cases. Warning, there is a little bit of math. There's no calculus, no Python needed, but it'll have to switch you on to think about math. Okay, this is a case of appreciation and leverage. This is the first rental property I bought when I was a resident in Australia, and this was purchased in 2003, so 20 years ago. At this stage, I went to a seminar. The seminar told me that I should buy five rental properties, after 10 years, sell one of them, and pay off the others, and then I'll have entirely passive income, as well as some tax deductions. And so what do you do when you're in your 20s? Okay, they told me to do that, I'll do that. So I bought this house with my then-boyfriend, now-husband. Thank goodness that worked out. And I knew nothing. I did no analysis. I did not know how to rent out a property. I handed over to a rental property manager, and I paid off. And the property never did that well. It broke even, but I never made a lot of cash on the side based on it. And then this is 2003, so in 2007, I moved to the United States. I had some emergency funds in a bank account, but this is really an example of a bubble, because I didn't put any more money in, I didn't really take any more money out, and so let's fast forward and see what happened. The loan was for $440,000. The balance on that loan is now $20,000. I put in $48,000, which is, I think, 10% at the time. And this is how much it's worth now. So from $489,000 Australian dollars, it's now worth $1.8 million. And I didn't realise this until someone tried to buy the house, and we said, no, that's crazy. And that is Melbourne, Australia for you and the city. That's appreciation of 7.5% a year, which compared to the stock market, doesn't look that great. But you know what's great? It's the power of leverage. As I'd mentioned, the tenants paying off the mortgage for me, I'd never put any more money in, but I didn't take any more money out. And my initial cash investment was only $48,000. So over that time, I've multiplied $48,000 by more than 37, and that's the power of real estate. So I wish I had done this every year for the last 20 years, but that wasn't the case. I got busy with life, had a family, loved academics, and wouldn't change that for anything. So appreciation is a major advantage for radiologists, much more than cash flow. And appreciation can be three forms, inflation, just that 4.8% a year for single-family homes, or it can be demand. Melbourne, Australia is a very attractive place, and there aren't that many houses. So that's why that appreciated so much. And then there's forced appreciation, and that is if you do a renovation or you add on another room, then you're now increasing the value of the property. And this is a well-known method for people that don't have a lot of capital, like all of you. People buy a fixer-upper, they rehab it, and then they rent it out. And then once that property appreciates and you've got a track record of renting, you can then refinance and take money out, and you take out more than you bought, the money that you used to buy and rehab it, and then you repeat it again. Case two. Case two is about income. And Baltimore is a pretty attractive place for income or cash flow. This is our first rental property in Baltimore. It was $160,000, bought it in 2021. Now it's worth more than $200,000 by Zillow. And at that time, we put 20% down for an investment property. And there are three metrics we now use when we analyse properties. The one in Australia did no analysis, and this is now what we do. So there's a cap rate, the annual cash flow, and cash on cash return. So let me explain that. There's a little bit of math. The monthly rent for this property is $1,700. The expenses, the three main expenses are property taxes, insurance, and maintenance. That's $4,700. And then the principal interest, taxes, and insurance, every month, the major regular ones is $847,000. Okay, so first of all, the cap rate. The cap rate is your net operating income. So your rental income, that $1,700, minus your expenses, this is the property insurance and maintenance. So that's what you met the profit in essentially over the purchase price, which was $160,000. The cap rate is 10%. So that's the return on the property every year. But that's unleveraged. So what is leveraged is cash on cash return. So let's look at that soon. The annual cash flow that I'm getting per year after I take the profit and then take away the mortgage is just under $9,000. So that's $9,000 a year. Doesn't sound that impressive, but just remember that this isn't essentially not taxed because you've got depreciation benefits as well as other expenses that can be deducted from that $9,000. So that's pretty good. And if you've got, say, five or 10 of these properties, then that's a pretty healthy annual passive income. And then the cash on cash return is really what helps you compare it to stocks because that is your cash flow per year based on what I paid to actually acquire this property, which is $32,000. So I'm far beating the stock market at 28% cash on cash return. And this is the power of leverage. So we've got some tax benefits. This is appreciated a little, but not as much as somewhere in California or New York. But I'm getting passive income and I'm able to use leverage. I only put in $32,000. Okay, I'm going to finish up with case three. And case three is about cashing out. So cashing out is a major advantage, particularly last year and the year before where the interest rates were lower. This is the first house I bought in the United States with $24,000 down. After 13 years, when I did do a cash out refinance, I owed $126,000. I had some principal in the property after the tenants paid it off over many years. And then it was appraised at $340,000, which is $100,000 more than in 2008. And so the bank is able to increase the amount it gives you in terms of loan. And it will feel that it's safe to give you 80% of the value of the property, which means that it can give you a loan of $272,000. While I only owe $126,000, this means when I take out a new loan with a lower interest rate, I can actually pull money from this, which is not taxed. And so that's what we did. We took out $146,000, which we used to make a cash offer on another house. And on that house, we also took out a loan after we made up the cash offer. So think about this. You put in $24,000, and then 13 years later, you're able to take out $146,000 that's not taxed. I know what you're thinking. This sounds like a lot of work and a lot of math. But fortunately, no Python or calculus. You're thinking, I have no time. Well, if you think this is valuable, you'll make the time. And not only have I made the time, but I've also found it really interesting. I've learned a lot. It's really empowering learning something outside what you are fellowship trained for, what you went to university for. You might think I have no expertise. Well, fortunately for you, there are so many free resources out there now in terms of podcasts, as well as really great books that you can buy, and I'll tell you two of my references later. And then finally, it sounds like a lot of work. Yeah, it is, depending on how much work you want it to be, because you can certainly get a property manager like the property I have in Australia. And I don't do any work on that aside from make some decisions. So if you want to get started and take action now, I have three tips. Learn, ask, and share. I would say the first investment property is the hardest. This is some resources that you can use to learn. The BiggerPockets podcast is excellent. There's a whole community and forum. And then don't just learn. Think about action. You're never going to get the perfect deal. The first rental property I bought in Australia, I thought that was a bad deal because I wasn't making any money from that. I was just breaking even. But fast forward 20 years, it was a really, really good deal. And that's the thing with real estate. It's very safe. So I conclude by saying that wealth is abundant of choices. It's not just about having a high bank account. It's what you can do with your time and what you can do for the people that you love. The four advantages of real estate, my acronym is TAIL, taxes, appreciation, income, and leverage. And then it's leverage and appreciation that builds wealth for investment property investors. Thank you very much.

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