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An introduction to Financial Independence for PAs

Are you a new grad PA-C with a ton of student loan debt? Or are you a seasoned PA that loves your career, but is starting to notice symptoms of burnout and have been asking yourself, “How in the world am I going to keep grinding this out until I can retire at age 65?” Pursuing financial independence as a PA can be the solution to help you pay off your debt sooner, avoid the temptation to “keep up with the Jones'”, and live your life in abundance now instead of putting your life off until a day many years in the future. 

How do most people define financial independence (FI)?

Financial independence (FI) is the point at which your invested savings combined with your other assets of your net worth equal 25 times your annual expenses. This is based on the Trinity Study, which showed that if you have that amount invested, you should very likely be able to live off this nest egg for at least 30 years while withdrawing 4% of your portfolio annually. 

It’s important to note that FI is calculated on your projected annual expenses, not your annual income, unlike what many retirement calculators out there try to do. 

Some of you may already be familiar with the acronym FIRE, which stands for “financial independence retire early”. If so, you may be thinking, “But wait, if I plan on retiring early in my 40s or 50s, 30 years doesn’t sound as though it would last me until the end of my life?” That is very true, so if you are planning on retiring early, you likely should aim for having 30 – 33 times your annual expenses in your nest egg. 

What are the steps to figuring out how close or far a Pa is from reaching FI?

First, you would want to assess your current situation by figuring out your net worth. Your net worth is a simple math equation: your assets – your liabilities = your net worth. Your assets consist of things of value that you own. For example, if you have some money saved and invested in your 401(k), that amount would be added to your asset column. Your liabilities are things that you owe money on, such as your student loan debt, credit card debt, automobile debt, etc. Sometimes, an item can be both partially an asset as well as a liability, such as your primary residence. In that scenario, you would put the total value of your home in the asset column, and the total amount owed on your mortgage in your liability column, as the equity of your home is what makes your net worth increase. See how simple it is to calculate your net worth? It takes some time, but you need to see where you’re starting from to get a sense of where you’re going. 

I love using Personal Capital as a free tool to help track my net worth over time. It is so motivating to see the amount on the graph increase with time! It can feel concerning to see your net worth dip during bear markets such as in the beginning of the COVID pandemic, but if you look at the history of the stock market over many years, the value always eventually increases over time. One of the best things you can do during bear markets is to leave your investments alone, and even continue to invest because the market is viewed to be “on sale” during those times! 

So once a PA has calculated their net worth and looked at their total financial picture, how can they figure out how long it will take them to reach FI?

Once you know where you’re starting from with your net worth, you can use that information as a starting point to determine how many years achieving financial independence is away from you. Another excellent tool to help with this step is a compound interest calculator, such as this one. Keep in mind that this tool is used for your assets that are invested (such as your retirement accounts like your 401(k), 457(b), Roth IRA, HSA, or your taxable brokerage account). You would add your other assets that aren’t invested such as cash or home equity back at the end to see what your projected net worth would be. 

The compound interest calculator allows you to enter how much money you expect to contribute per month to your investments, and then you can enter in a reasonable estimated interest rate to see how much your investments would be expected to grow and compound over whatever timeframe you choose. A reasonable estimated interest rate is 7% – 8% on the conservative side, or up to 10% on the more optimistic side. 

Go ahead and play around with the compound interest calculator and your numbers to determine a rough estimate of when you’ll be able to reach FI! Doing so will likely give you more motivation to try to invest more for your future. 

Alternatively, you can use your savings rate as a percentage of your take-home pay to calculate how many years away you are from retirement as demonstrated by one of the OG FIRE blog articles written by Mr. Money Mustache

One final way to be able to reach FI is when you have another income-generating asset besides your investments that can cover your annual expenses, such as having a business, or being involved in real estate investing. For example, some members of the FI community will own enough real estate properties that are either long term rentals (where they are essentially landlords renting to tenants) or short term rentals (where they have AirBnB or VRBO properties) or a combination of the two, and the annual income of these is at least the total amount of their annual expenses. Once you reach the number of properties needed for your situation to reach this point, then you are considered to have reached FI as well. 

Although some people will have reached FI by a combination of real estate investing, traditional investing in the stock market, and owning a business, you could simply focus on investing in the stock market to get to FI. 

What are some of the most interesting thigns that you’ve learned from the FI community?

Oh there are so many! I truly feel as though learning about FI has opened my mind up to view life with a whole new perspective. 

  1. FI really is all about math. If you lower your expenses, increase your income, and invest the difference, you’ll reach FI sooner. 
  1. Investing really has never been easier and more affordable with low-cost broad-based index funds. 
  1. There is simply no point in spending extra money on fancy things in life if they truly don’t bring you more joy out of life. One of the best feelings I’ve had was returning a leased Jeep Grand Cherokee that we were spending around $680/month, and driving an older Chevy Suburban that we paid $5000 in cash for instead. The fancy new vehicle just didn’t bring that much more value to my life. Sure, I miss the heated leather seats and heated steering wheel in the winter, but I’m also spoiled by my husband who will brush the snow off my car and start my car for me in the winter, so I can’t complain too much!
  1. Additionally, it is equally important to decide what you and your significant other truly value in life, and not feel guilty about spending on those things. Perhaps you find ways to save in those areas if you can, but again, even if you can’t, if it’s something you truly value and can afford it within reason, go ahead and spend the money. 
  1. On the same note, it’s so important to enjoy your journey to FI. If you live so incredibly frugally that you are in deprivation and miserable for the years it takes you to reach FI, you’ll have regrets, and possibly a relationship that is suffering. Additionally, who says that you’re guaranteed to live that long, as well as be in great health once you get there? Enjoy the here and now while saving, investing, and planning for the future. 
  1. If you’re like me and absolutely love to travel, consider travel hacking with travel rewards from credit cards. Travel hacking has opened my eyes to being able to travel the world for nearly free by using my credit cards to pay for everything I normally would anyway (and then paying my cards off on time and in full every single month to avoid having to pay interest). To learn more, you can either check out episode 22 of the PA the FI Way podcast, or you can read more about travel rewards. I’m so incredibly excited because my husband and I are looking forward to our first major travel hacking trip to Costa Rica in mid December! We will be paying for the hotel in points, costing us $0, and will be paying for our flights with Southwest points and the Southwest Companion Pass, which will be about $160 in taxes and fees total for the two of us to fly round trip! 

Besides your excellent podcast, what are some other resources that may be a good starting point towards FI?

There is an absolute wealth of FI information out there, so I’ll mention a few of my favorites!

Some of these links are referral links, and as an Amazon Affiliate, I would receive a commission from qualifying purchases at no additional expense to you. 




  • The White Coat Investor podcast is as excellent as his blog. 
  • Choose FI is where I first learned about FI, and I’ve really enjoyed their episodes!
  • Mad Fientist’s Financial Independence podcast is great as well. 
  • Passive Income MD encourages health care providers to consider working on side hustles such as real estate investing to build wealth and achieve FI sooner. 
  • The FI Show discusses great FI topics. 
  • Afford Anything with Paula Pant covers many FI topics as well as real estate investing. 
  • Coach Carson’s Real Estate and Financial Independence podcast covers both of these topics in very easy to follow episodes. 

What does financial independence mean to you?

Pursuing FI means several things for me. It means that I don’t have to work in a traditional PA role for 40 hrs per week until I’m 65. This can help with the feelings of overwhelm and burnout as a health care provider. I’ve already enjoyed the luxury of cutting down to 35 hrs per week in my primary PA role. This allows me more time with family as well as more time to work on my podcast and business. I may even consider cutting back on working as a PA more once we have kiddos in the future. Having the option to retire early provides me with a better mindset about work now, and it will be so freeing once we actually reach FI. 

Unfortunately, my husband and I both share a similar background story in that our fathers each passed away before traditional retirement age, mine in his early 60s and his in his mid 50s. These experiences taught us that we are not guaranteed to even live until age 65 and beyond, so trying to achieve financial independence with the option to retire early if we chose to do so before traditional retirement age is a huge goal for us. However, it is absolutely vital to us that we enjoy our journey to FI, and what this means for us is to spend quality time together and with our family and friends enjoying our favorite hobbies such as ice fishing and traveling in our beautiful country and world that we live in. 

So what do you say… Are you ready to join me in being a PA the FI Way? 

Thank you so much to Shayne and Jordan for the opportunity to create this guest post for The PA Blueprint! 

Kat, PA-C, Founder of PA the FI Way

I’d absolutely love to hear from you! You can connect with me any of the following ways: 

Take a listen to the PA the FI Way podcast on Apple or the major podcast player of your choice. 

Visit my website to read blog posts and subscribe for future updates: pathefiway.com

Follow along on Instagram: @pathefiway   https://www.instagram.com/pathefiway/

Join the private Facebook group created for current and future PAs on their journey to financial independence: https://www.facebook.com/groups/pathefiway