How Moving to Memphis Cost Us $500k

By my estimation, my family’s move to Memphis cost us about a half a million dollars. Find out below why I feel every cent was money well spent.

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Introduction

Time flies. It feels like only yesterday that my family was living the SoCal life.  We had our forever home in Los Angeles, just miles from Santa Monica beach.  During the week, I commuted the requisite hour each way to my surgery job.  My wife ran logistics and led artistic direction at the county museum.  During the weekends, we visited friends and enjoyed the sand and sun at our beach club.  

But beneath the glitz and sun-drenched surface, all was not as it seemed.  I was burnt out from being an employed doctor and administrator during the Covid pandemic.  I yearned for more autonomy and a more satisfying balance between medicine and my other passions of real estate investing and content creation.  My wife wanted to advance in her career and spread her wings, but saw little opportunity for this at her old museum.  Privately, we worried about affording private school tuition, because despite a combined salary that was quite high, cost of living was a major worry.

My readers will know what happened next, of course.  I embarked on a journey towards moFIRE that is well documented here on the blog. And more recently, my wife accepted a new job in Memphis, I quit my employed position, and we moved our family across the country to the mid-south.

Read more: Your Mom Is a Badass | Letters to My Sons

The Memphis experiment begins

My wife now has her hands full in her new role. As expected, it’s offered incredible opportunities for her to use her skills to the max.  It’s stressful, she says, but extremely satisfying.  I’m still settling into my mixed life as a locum tenens urologic surgeon and real estate investor, but so far so good.  My kids are at an incredible private school in Memphis and my parents (who accompanied us in our journey) are seemingly content as well.

I can’t say it’s been an easy transition for any of us, but I’m so happy that we took the risk.  I’m confident that we’ll look back at the decision as one of the best and bravest of our lives. 

Aside from our social lives, one area that has truly suffered is our bank account. I’ve calculated that our move to Memphis has set us back about a half million dollars. 

No work, no pay

One of the big problems with an employed career in medicine is that if you don’t work, you don’t get paid.  This is one of the most limiting factors to wealth creation in a typical job.  You’re only making money when you’re on the job, putting in the time.  And there are only so many hours in the day to do that. 

It’s one of the main reasons why I started investing in stocks and later into real estate. As opposed to a typical job, investments make money for you while you sleep.  They tirelessly compound your money and are the only true path to wealth. 

Read more: Why I’m investing in real estate over stocks – Part 1

But when I quit my surgical job, my dependable, bi-weekly paycheck stopped coming.  And though at times I’ve compared my paycheck to handcuffs,  at least they were golden handcuffs. 

After we moved to Memphis, I interviewed with practices and waited for my medical licensing to transfer over to Tennessee.  After I decided to instead give locum tenens medicine a try, it took a few more months for additional licensing and hospital credentialing. 

By the time my first locum tenens assignment started, it had been about five months since I had treated a patient.  Over that same time period, I could have earned about $250,000 if I had just stayed put in my urology practice in SoCal. 

Deciding not to catch a falling knife

So we lost about a quarter million dollars of potential income while I waited for medical licensing.  This probably wouldn’t have been a huge problem for us except for the fact that we also had to buy a house in Memphis.  We thought about renting, but struggled to find a rental home that would fit our needs. Just like in Los Angeles, we wanted to house not only my immediate family, but my parents as well. 

And although real estate in Memphis is MUCH cheaper than Los Angeles, big houses in fancy parts of town are always expensive.  We settled on a house that cost about $875,000, requiring a down payment of about $175,000. After closing costs, we put down $187,000.

We had initially planned on just rolling over some of the equity from our Los Angeles house to Memphis, which would have easily paid for the new house.  We got very lucky with the appreciation of both of our houses in Los Angeles.

Read more: Is owning a home a good investment? 10 years of home ownership in LA, analyzed

But in late 2022, trying to sell a luxury home was like trying to catch a falling knife.  Despite a big drop in our asking price, we saw good interest, but no offers.  We eventually just added the home to our rental portfolio and rented it out for the year. 

We stubbornly refused to sell assets to come up with the downpayment for our Memphis home, so we borrowed from our SBLOC instead.  While this allowed us to avoid a taxable asset sale, it did end up being an expensive choice.  With the Federal Reserve’s campaign against inflation, variable rates are running almost 10% right now.  This means that we’re essentially paying an extra $19k a year for the privilege of owning our Memphis house. 

Read more: Why is the Federal Reserve Raising Interest Rates?

Odds and ends

The rest of the half million dollars was consumed by moving costs and some light renovations that we had to do in our new home.  While it’s a beautiful home, it lacked overhead lighting and was a peculiar color throughout many of the rooms.  So between new furnishings, electrical work and painting, we spent another $50k of cash.

That brings our total cost for the move to Memphis to about a half million dollars.

This isn’t a sob story

Despite how this post reads so far, it’s not a sob story.  We could have done a lot of things differently.  For example:

  • We could have just stayed put in Los Angeles. 
  • We could have just rented a home in Memphis
  • We could have put off renovations
  • We could have sold assets to avoid more debt

But the point of this post is that I feel that every cent was well spent. 

Life is short

For once, I’m going to use the battle cry of the financially irresponsible:  YOLO (you only live once).

You’ll usually hear this acronym when someone is blowing a ludicrous amount of money on a new handbag or vacation that they can’t afford. But here, I’m applying the YOLO philosophy to life changing opportunities. 

When my wife and I looked at the trajectory of our lives and thought about where we wanted to end up, it was 100% obvious that we had to take the leap.  It was an essential step for my wife’s career and it was an essential gamble for my own ambitions as well.

Read more: Your Mom Is a Badass | Letters to My Sons

Luckily, we had saved and invested enough where we figured that we could absorb a few financial bumps along the way.  And if everything went to hell in a handbasket, we figured we were young enough where we could cut tail and run.  Once the smoke cleared, we had confidence in ourselves that we be okay. 

This is the privilege of being (relatively) young and (relatively) rich. 

Read more: The Darwinian Doctor’s Net Worth and Asset Allocation | Early 2022

Conclusion

It might be premature to declare victory.  We’re only about 10 months into this experiment.  But my kids are thriving, my wife is kicking butt, and I’m living an enviable life of autonomy and growth. 

By working just a week or two a month as a locum tenens, I’m on track to make as much as I made full time as a urologist in SoCal.  The rest of the time, I’m free to expand my real estate knowledge and experience.  I’m also free to give our investment portfolio the time it deserves. 

This means formalizing our bookkeeping, tightening up our asset protection, and also maximizing our income.  With some recent losses from our short term rental portfolio weighing us down, I see this as a sign to move more strongly into large multifamily investment.  The vast majority (26 of 28 units) in our portfolio are multifamily, and have done consistently well over time. There are even more economies of scale with larger multifamily properties, especially with financing and property management.

[By the way, if you’ve read this far and would like to consider investing into this with me, please email me to set up a chat.]

Only time will truly tell if we were right to move to Memphis and burn through a half million dollars along the way. 

But I’ve noticed that the winners get to write the history books.  So here’s to winning.  Let’s get busy. 

–The Darwinian Doctor


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Financial Samurai
7 months ago

Great update! And congratulations on the move. It is wonderful to hear. You guys are settling in a lower cost city and thriving. I’m impressed you took action because the easiest thing for most people is to just do nothing.

Best of continued luck! Maybe you’d like to chat on the FS podcast one day. If so, shoot me an e-mail!

Sam

Paul Clein
Paul Clein
7 months ago

What’s the price of happiness?
Well, I’d rather be $500k down and happy than $5 million up and miserable.

Common sense
Common sense
7 months ago

how is drowning in debt happiness? Living life on the edge of a margin call and hoping that the Fed bails you out with lower interest rates is not exactly a good plan. Leverage is a hell of a drug and you don’t even realize how much of a junkie you are at this point. It’s a tale as old as time and always ends in tears. Every time I’ve seen people stubborn to deleverage because “the market only goes up”, it’s ended in misery.

James
James
7 months ago

Boo hoo! Go back to California.

globetrotter
globetrotter
7 months ago

First gen immigrant/immigrant trap–large expensive house, car, and Private school. If you buy a nice house, skip the private school, which will be about a million per kid…at least until you have too much money or they are brilliant and older. You still have not really said if you are happier….and real estate does have potential pitfalls, and is quite fickle in the long run.

Mark Clemons, MD
7 months ago

Welcome to the Memphis area, Except for college and Med school, I have lived here my entire life. The saying has been “It is a good place to raise a family. Just like many cities, there is crime, but there are a lot of places that are pretty safe to live. The cost of living and not having to spend hours each day commuting will pay for themselves. There is also a lot to do, but you have to make the effort to find them. They will not find you. Enjoy, We have heat, but unlike S. California, we have a few weeks of real winter.

tonny
tonny
7 months ago

I like your blog, thanks for sharing. I love this information you shared with us.

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