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Christopher H. Loo, MD-PhD: So welcome, everybody to this week's podcast episode for the Financial Freedom for Physicians Podcast. And I'm your host, Dr. Christopher Loo. And we have a weekly show where we bring on physician entrepreneurs, investors, people on the cutting edge doing things we imagined impossible. So today we have a guest, Dr. Dewan Farhana. And she is the founder and CEO of Doctor Finances. And she's going to talk to us all about her journey, and how she came, to be so welcome.
Dr. Dewan Farhana, DO: Hi, thank you so much for having me, Chris. I really appreciate it. I'm excited to be here.
Christopher H. Loo, MD-PhD: Yeah, we were just talking backstage a little bit. And we both had spoken on White Coat Investors. And as we had connected and just talked through email, the internet and just the network. So I'm glad to get you on the show. I'm trying to get the word out and the brand out and awareness out. So I know you do all things, finances, I know you're interested in startups, you've written quite a number of books, and you've spoken. So tell us how you got started. And we'll go from there.
Dr. Dewan Farhana, DO: Sure. So I can start a little bit with my sort of medical journey. So I did my undergrad at Rutgers. I was set to becoming a clinical physician my whole life. I imagined being the chair of the physical medicine rehab department at some top hospital. But while I was on my journey, I've always kind of been like a founder at heart, I've always been interested in working with different organizations and things like that.
So while I was in the last year of medical school, one of the things I noticed is that there were a lot of these technology products that we were using, that were just like having a huge impact. And this was something that people were using around the world, like millions of people, and I was really curious about it, like Dropbox and Evernote and things like that. And so I started learning a lot about startups. My spouse at that time was already immersed in the technology industry, he previously had one of his startups acquired. So I was starting to get a little bit curious, I didn't know anything about startups, how it works, what it means by technology. Meaning, I've always heard about business school, there's such a thing as business. And I've heard about technology, but not, it was like a mix of combining technology with business and doing it at scale.
And so, through my research, what I've learned is that, the way that startups are working is that you're basically leveraging software to reach millions of people within milliseconds. And so I was reading articles by Marc Andreessen. He's one of the top VC Investors here. And he was saying how software is eating the world, eventually, every single company's going to be a technology and software company. And so, after fourth year, I matched into residency and then, but at the same time, had the opportunity to move here to Silicon Valley and work on a start up. I had found a great founder. And so I just decided to take that opportunity. Because it was something that I thought about all the time. And I'm very much a person who, whenever I see a great opportunity, I go for it. I try not to let things like structural reasons or family reasons stop me. So if I see it as a really good opportunity, I'll go for it.
And so I decided to move here, and my husband on a personal side. My husband was already living here for about three years. So we were doing long distance for three years. And so if I continued with PM&R Residency and training, that would be another seven years of long distance, then he would have to move back. And he had a great opportunity at his job. And he was moving up quickly in his current position. And we want to start a family. So it just made a lot of sense for me to move here and work on the startup. So I did that.
I was the founder and CEO of Betternest. And what we did is we connected professional home organizers to people who really needed it. So people with disabilities, different illnesses, even small businesses, to help them get digitally organized. It's a $27 billion industry. And, we built that platform out as a marketplace. And while I was working on the startup, I started discovering robo advisors, because there were these other startups that were disrupting the financial industry. And basically, I learned about Wealthfront and Betterment and how you can just invest in something called low cost index funds. You have this thing called compound interest, apparently, that I've never heard of, and you can have your money working for you while you eat, sleep and shower and stuff. And so I was like, Wait, what is this?
And so previously when I've heard of different things like finance advice. I was like, No, this is a scam because like, if it was something important, someone would have told me I mean, hello. Like, I've, I've been involved in organizations my whole life. I have some great mentors, everyone around me is so smart, I've worked with some top notch surgeons, someone would have said something as amazing as this, no one ever did. But I took it seriously this time, because these were other full startups, well funded startups working on this idea and that they were saying that, most financial advisors can't, figure out like, what's going to happen in the market, and that if you just follow the market index, and you invest, and you invest for the long term, you can grow your wealth. So I told my husband about it, and he was like, No, I don't know, because he wasn't even contributing to his 401k. And so I asked my sister about it, who's always been my older sister and has always been smart. She's a board certified rheumatologist. And she said, I've never heard of it. So my brother in law, who works in Wall Street, said, I haven't heard of this. I was like, okay, so we did a lot of research. And then we realized, Oh, my goodness, like, there's this whole subject of personal finance and compound interest and how you can reach financial independence. And there's actually a Trinity study that was done, and you can actually invest and reach financial independence that way, so.
So as soon as we found out about that, we just went all in, like, we were the type, like, we just didn't know, this concept like, and, I always say it was like, I found the answer to like an exam. That's what it felt like to me. And so we just went all in, like we just like contributed to every single account, you could think of 401k, solo 401k, HSA, Roth IRAs, Backdoor Roth, 529, front loaded our Kids’ 529, and stuff. And so as a result, and we were fortunate that we both had, the way we built wealth is basically just high income, like we were high income earners, and we just contributed to low cost index funds. So it wasn't anything fancy, it wasn't like we did crypto or, or real estate or anything, we mainly did it with low cost index funds. And by having the market help us fight inflation, as well as grow our wealth consistently, we reached financial independence in early 2020.
And as a result, I transitioned out of the startup, to focus on a couple of things. One is I have two little ones, so my five year old and one year old. And then also, there were a lot of physicians reaching out to me because they wanted more information on how they can transition from clinical medicine into tech. Because previously, it was like, if you left clinical medicine, it was like a big deal. Like what is going on? And now because of everything that has happened, which Chris you and I couldn't predict now, it's like, Oh, you guys are like pioneers, and previously we were seen as weirdos, moving out of clinical medicine.
But, I kind of always knew that I could go back to clinical medicine, so for me, it wasn't like, fortunately, it wasn't like burnout or anything like that. It was just like, look, here's a really great opportunity, you have this co-founder, you have this opportunity to build this great startup, like, do you go for it? Or do you not? And I'm a DO as well so I know that there are definitely Family Medicine spots, especially in certain areas that are always available for DO’s. So I was like, Look, I can always like to do Family Medicine, which I always loved. I loved all aspects of medicine. Ultimately, I like the PM&R. And so that's what I did. And so I did. I do consultations for physicians. And then I started teaching personal finance online, because I was like, wow, other people need to know this information. So I started posting, I think it was back in 2016, 2017, about this information, disability insurance and stuff. And now I'm recently doing a Fellowship on Venture Capital, because I'm interested in potentially joining a venture capital firm in the near future. And so that's where I am.
Christopher H. Loo, MD-PhD: Oh, wow, that's an amazing story. And I think we have so many similar paths, because my path was in 2008. And, it was in Orthopedic Residency, and there's this 2008 crash, and there were just all these markets on sale. So and I came across this really interesting decision making way of looking at things with that was coined by Jeff Bezos and he was like, if you have a fork in the road, you want to go when you're 80 and think about look backwards and see wood, wood making this decision or making not making this this decision leave you with regret? So, and it was a very fascinating way to think about things and that's sort of the way I think about things now, and it's like 2008 and then of course, your decision. So this takes a lot of courage and, and this so many resonating and you know I'm fascinated with the tech space. I'm involved with these entrepreneurs and NFTs, DAOs, Web3, metaverse. So that's like, where my focus is now. But it's so awesome to see physicians, forward thinking physicians thinking about where we're headed into the next 20 years. Where are we going to be, really breaking outside of these traditional modes of thinking? So tell us, yeah, tell us about your startup. And, it's exciting. I want all my audience and listeners to know more about you and about what you're doing.
Dr. Dewan Farhana, DO: Yeah. One of the big questions I get is like, how can they do what I did? And also, more importantly, like, how can people join the tech industry? And, I think it's so important for physicians to be aware that they can join the tech industry, because there's so many opportunities here. I was talking to a couple of the women that are going to attend the AST conference. And what I was saying is, there's a lot of great options like, but real estate is not the only option. There's options in the pharmaceutical industry, there's options in the tech industry.
The pay in tech is also great, and in tech, you get paid for the value and talent you bring. So you know how, like in medicine, if you're like the top notch Harvard Neurosurgeon, there's like a cap of how much you can make, and especially if you go to a rural hospital, you may get paid less, but just because you're the top Harvard Neurosurgeon does not mean that you're going to get the highest pay. But in tech, if you're like, the top machine learning expert, oh, you're making millions. So that's sort of like the value and the talent you bring is reflective of how much you get paid. And physicians are really well positioned to get paid well here, as long as you know how to negotiate, your worth, the value that you're bringing. Because everyone has a lot of talent, right? Like, everyone in medicine is basically a superstar, because they've worked so hard to get to that place.
And so, the approach that I took is I was a founder. So in a sense, I did it the hardest way, where basically, I built a startup from the ground up. And to do that, you need a really great idea. But more importantly, you need the execution, and you need a bulletproof founding team. The statistics itself is hard. So 90% of startups fail. Most VC firms are not profitable, these are things that are really important to understand. And when you're also founding a startup, you should understand, like, do you need venture capital money, because venture capital money has its own things that you have to be aware of, and so like, basically, you're using this money to, like, usually, the idea is that you're disrupting an industry, like Uber disrupting the taxicab industry, or Airbnb disrupting the hospitality industry. And you use VC money to grow exponentially, often overtaking growth over profit, and so you're using that money. And basically, what VCs want is that they want that money back in 10 years, that they would take longer to get back in the stock market for, say, 40 years or so.
And so you can join as a founder, build a startup from the ground up, you have a great team, you have to raise funding, you grow, you hire employees, you make money, you give yourself a salary. And then the way you get an exit is either you get acquired, or you IPO at the stock market. The other option is you can join as like a medical founder, you can join as like a founding partner, like a medical founder, a board member, those are also other great options. And that's the way a lot of physicians join. So if you're interested, you can network with different startups, you can join groups, you can join accelerator programs and start contributing to some of your knowledge, information, and get to meet other founders. And you can present them with ideas like, Hey, I would be interested in joining as a medical founder and so on, or be invited as a board member. And then the other way to join us to fund right, you can be an angel investor, or a VC and you can fund startups. So that way, you don't have to do any of the physical work. But you fund the companies.
And that in itself is also a bit of a full time job in itself. Because what people don't realize is that most angel investors actually don't make money. Because, the way the statistics work is that 10% of the startups end up being successful. And that's what we see in the news all the time. But the other 90% quietly go into the dark, so as an angel investor, you have to be able to figure out that 10%. As a founder, you have to be able to build that company that's within the 10%. As a board member, you have to join that company or medical founder or a regular employee to join that company. But it's really important to understand is that a lot of people think that if I found an entire company by myself, maybe that's how I have the most impact and how will make the most money because I have the most equity, but keep in mind If you have a company that's not worth a lot and you have 100% equity, it means nothing. But if you have 1% equity in Facebook, you're basically a billionaire.
So, it's kind of like, if you have a great idea, and your company's valued at 200 million, and you have 10% equity, you will still walk away with someone who is an employee at one of these fast growing companies like Facebook and Airbnb and things like that. And you can still have the same impact, think about it, the impact, now you're part of the larger organization, you have an entire team, you have everything set up. So in a sense, you can have a much bigger impact than trying to build something from the ground up. But it's all possible, you have to go with what your gut is telling you, and what works, and where you are in life. But what I always say is, always understand your personal finance first, because when you do, that's when you can make big decisions.
In fact, my spouse had a really good opportunity to join a startup two years ago. And so we did all the math, and we ran all the numbers, and we realized that it's better for him to stay at his corporate job right now. And one of the tech companies then go and take this huge risk, and work on the startup from the ground up. Because if you look at the returns in the market, and the salary and the equity and how much you'd get back, you're able to make that decision. So that's a really hard and tough decision to make. Because, even if it's a well funded startup, if you don't understand your own personal finance, it's hard to make these decisions. So a simple calculator, and a simple Excel sheet will change your life. And so as long as you understand that, you can make almost any decisions on what company you should join, and so on.
Christopher H. Loo, MD-PhD: That's the one. That's awesome advice. I got done coaching this couple and they did the 20% savings plan, and they're figuring out what to do. And, a lot of physicians, they're trying to get into these startups and IPOs, and all of these things, and they don't have their finances, understand basics, so that’s high risk. So, but, yeah, you brought up a couple interesting points, especially in the VC angel investing, the startup space, it's all about network. So what are some ways that physicians can join? What are some networks? And how are physicians able to join these startup networks?
Dr. Dewan Farhana, DO: Yeah, so first things first, you have to make sure that you're subscribed to all of these amazing, like technology magazines. So anything from Recode, TechCrunch, Wirecutter, although, Wirecutter is more like New York Times. VentureBeat, that's another good one. You want to make sure that you're subscribed to those any new startup, you're going to see it mentioned in AngelList or F6S, or the PitchBook, you can see like how much, like what startups are available, you can also check its funding and the level in TechCrunch or PitchBook as well.
And then the best way really is like, just get immersed into the ecosystem. So whichever way you are, wherever you are in the closest proximity, there are colleges and universities, perhaps even medical schools that have accelerator programs, incubator programs. The best known incubator program here is called Y Combinator, they gave rise to Dropbox, Airbnb, and Stripe and things like that. And even then, remember, all of the companies that they invest in, not 100% of them end up being successful, very, a very small amount, but you're gonna obviously hear about all the top startups.
So, getting into the network, and starting with, from a perspective of like, learning and understanding, start understanding some of the language, understand, like, what is the rate of success, like a lot of people, they think that everyone is becoming a billionaire here. And that's not true. it's, it's understanding, it's really a lot of luck. That's one thing that I definitely learned, like, I thought, if you work hard, and you have a good idea, like you will be successful, that's kind of how it works in medicine, right? Like if you work really hard, and you're pretty smart, like you will get through. But that's not the case in startups, because there's so many other factors that play into this.
So, for example, DoorDash, was struggling right before the pandemic, and they really skyrocketed after the pandemic happened versus a lot of the co-working spaces like WeWork, and some of the women led co-working spaces, they all crashed. So you never know. Sometimes everything is out of your control. So you just never know, like, what is going to work and what's not, you just do the best you can and there's a lot of factors that go into it. So networking and understanding like, what is it that you love? How can you contribute? What's a good team that you can join? To make sure that the startup is funded, you want to make sure that it's on the right trajectory, like make sure about all of those things. Don't be afraid to ask questions. And so just get into the network and start getting on the listserv.
And then once you're ready, the best way to approach a founder or to join a team is to get a warm introduction if possible. So you say, say, someone knows me, and I say, Hey, I know Chris, he's really great. And I introduced you, and then you'll get a much better response than cold emails. But remember, for especially VC, and even many of the founders, like, their job is to also read these emails, right? Like, as a founder, you're hiring all the time. So you really should be reading. So any cold email that you send is okay, too, because sometimes you don't have a network, you know.
And I know what it's like, especially for women, minorities, underrepresented groups, I get so little funding, like sometimes, the best form for them is to do cold emails. And that works, too. So do whatever works. If you have a passion for it, go for it. and of course, know your worth. Remember to ask for equity, how much equity what it means, how it vests, like, how long does it last? What if you leave the company like, these are all important questions to ask so so basically, start reading, start looking at some of these groups like AngelList and CrunchBase of all the different companies and then start to get to know founders, and then send them an email or contact, connect with them via Twitter, and, and try to get an interview and go from there.
Christopher H. Loo, MD-PhD: That's awesome. Yeah. And one thing is, with you living in the valley, are you seeing. So for example, the traditional way was you went through an IPO. But, recently a lot of companies like Coinbase, they did a direct listing, or via SPACs, we can talk about the advantages and disadvantages of the SPACs, but are you seeing companies raise money through tokenization? Because I know, some crypto companies, Blockchain companies, now issue tokens, so they don't really have to go through this other. And now some, our artists and creators are minting NFTs to generate funding, do you see any of that in the valley?
Dr. Dewan Farhana, DO: We're definitely seeing a lot of SPACs, which, there's controversy on all sides regarding that. And crypto and NFT spaces as well. The whole thing about the crypto and NFT space is, of course, still all speculative. So when people ask me whether, if you're getting your startup founded, or whatever, make sure that you really understand it. And it makes sense for your industry. So like, when it comes to, for example, personal finance, I always say, of course, you can invest in crypto or whatever, but keep it to less than 10% of your portfolio. Because there's things like low cost index funds and ETFs that have worked historically, and people have comfortably retired. And if you want to look into that, you can join the Bogleheads forum, for anyone that's not aware. And you can see how so many people have comfortably and happily retired early or on during retirement around 67-68. And, they were able to do so comfortably. So this is something that absolutely works.
Now, this is something like crypto and stuff, it's becoming more mainstream. I was actually not, I was not against it, but I was like, not into it for a long time, because it just was so speculative. And, but because the adoption rate is so high now, I always say so, ultimately, I did end up investing in crypto, very small percentage of my portfolio, but just understand that it's all speculative, like, you can put all of your savings and worth and everything into that even though a lot of bros here have. It's one of those, like, do you do the tried and true method? Or do you try to get rich, quick kind of thing, so, feel free to play around for less than 10% of your portfolio. But please be careful and stick to things that work, in my opinion.
Christopher H. Loo, MD-PhD: Yeah, that's wonderful. Do your own research. Don't invest money, you can't afford to lose, diversify. And so diversify, diversify. So, yeah, yeah, some of my friends there, they have 100%. Like, they're younger, they're millennials. So they have 60%, some of them are 100%, they don't even worry about the stocks.
Dr. Dewan Farhana, DO: And everyone's not playing the same game, like you have parents that have given you a huge safety net, and you can go and put 100%, you're young and you lose all that money, no problem, right, you can continue working. But if you're in your 40s, and you don't understand this market, be careful. And if you don't, that's one thing I also learned as a founder, a lot of the things that's not covered in the news is like how much of a safety net and privilege a lot of these founders come from. As we know, statistically, white male founders from Ivy League universities, Harvard, Stanford, they literally have like pipeline programs. And, they get funded and, they have this huge safety net, like even Jeff Bezos, his parents gave him $200,000.
A lot of us growing up, our parents did have $200,000 to just give us to build out Amazon. Things like even and even it's been hard for them. Even Bill Gates when he left, he went back, he went back to Harvard to study again. And he came back out. And they also had like VCs were like, really reaching out to them and giving them money, literally throwing money saying come and build this because we need someone to build this out. So just be careful and understand that not everyone is playing the same game, not everyone has the same level of privilege. So be confident who you are and what your risk tolerance is and go from there. So, be aware of that.
Christopher H. Loo, MD-PhD: Awesome. Yeah. On that note, I know a lot of people are interested. So any course products website, I know you're active on Instagram, so tell everybody how to contact you.
Dr. Dewan Farhana, DO: Sure. So you can find me on Instagram, I'm @doctor_finances, I post a lot of fun and visual content, everyone loves my content, I love making it. I'm really passionate about personal finance, because I feel like it honestly changed my life. If this didn't exist, my life would be very different right now. But I found out about how you can reach financial independence, about the Trinity study and things like that. And have all that posted on my Instagram so you can follow me there. And I also have a course. I have a comprehensive personal finance course. You need to know everything from mindset to, how to invest in low cost index funds to estate planning to 529s for your children. And I have two bonus lectures, one on how you can join the tech industry as well as cybersecurity for physicians. Since I'm also really interested in cybersecurity, how to protect yourself and making sure that you know you're not hacked online and what to do if you are so. So yeah, all of that is on my Instagram as well as my website, DoctorFinances.com.
Christopher H. Loo, MD-PhD: Awesome, awesome. So on that note, thanks so much. And we look forward to hearing about your progress in the future.
Dr. Dewan Farhana, DO: Thank you so much, Chris. I really appreciate it.
Christopher H. Loo, MD-PhD: Many thanks again for being here. If you’re new, you can find me online at Christopher H. Loo, MD-PhD, where I have links to other episodes or links to online resources that will support you on your financial literacy journey. I’ll see you there in on next week’s show. While I bring you thoroughly vetted information on this show regarding a variety of financial topics, I cannot promise you a one size fits all solution. This is why I caution you to continue to learn. Educate yourself and seek professional advice unique to your situation. If you want to talk to me, I welcome it. Please reach out via my website or email at Chris@drchrisloomdphd.com. I read and personally respond to all of my emails. Talk soon!
Editor's note: This transcript has been edited for brevity and clarity.