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Real Estate

About Physician Retirement

A retirement savings plan is supposed to help you retire, but the problem is you’re still working and your money is retired.

Real estate is the most powerful way to accumulate wealth. More people have become millionaires through real estate than any other means. We know how to find the property, create a plan for improving the cash flow, negotiate the deal, and manage the asset. Your passive investment provides you with the opportunity to earn an income without the nine to five. We create a unique business strategy that fits your financial and investment goals. Get the financial freedom you need to do more of what you love. We are Red Pill Kapital, with a K.

About retirement

Close to two-thirds of seniors cite finances as the primary reason why they remain at work, according to Provision Living, which is a provider of senior living communities. That means that the vast majority of people when they approach retirement age are unable to retire.

How long will your money last you in retirement, especially when you consider that one year of nursing home care in a semi-private room is projected to be $128,000
a year in 2021?

A 65-year-old couple retiring in 2019 can expect to spend $285,000 on health care costs in retirement alone. A working senior only has an average of $133,000 in retirement. How long will your money
last? Even if you’re a super-wealthy physician, have you anticipated an additional $285,000 in medical expenses? Have you anticipated $128,000 a year for the next 10, 15, or 20 years if you have to go into a nursing home facility?

You may think that the standard recommendations of putting 15 percent of your paycheck towards a retirement plan were impossible to achieve.

Even if you want to live on just half of your final salary, you need to put in about 40 percent of your income. This is dramatically different than what most people anticipate, and this assumes a historical return rate of eight to 10 percent, and I’m going to tell you that the future return rates on most traditional portfolios are going to be well below eight to 10 percent. They’ll probably be between six or seven percent, and when you take out inflation, and taxes, and everything else, your net rates of return are going to be two to three percent, so that’s going to have a dramatic impact on your retirement growth plan.

Future stock market returns will not match the historical returns.

The reality is the historical returns are eight to 10 percent. We expect the future to be six percent. When you take out the one to two percent in portfolio management or asset management fees, and you take out the two and a half percent, also, for inflation, you end up with essentially about a two to three percent rate of return. That’s not enough to sustain yourself long-term on a passive income
alone. It would just be setting aside a lump sum of money, and just eating through that at a very low rate.

If you bring in somebody who knows what they’re doing, it dramatically increases the likelihood of your success. You would call in a specialist if you had a pulmonary disease; you would call in a cardiologist if you had somebody with an unusual cardiac dysfunction that you couldn’t quite figure out. You would call in a neurosurgeon if you had somebody with a glioblastoma – so call in a specialist, call in somebody to help you navigate this. But, be careful who your specialist is, because usually the specialist that you call in is selling their plan, and it’s selling what they do really, really well, and what they make most of their money on.

If you do call in a specialist, you will get a more formalized retirement investment plan in place.

Almost half of the people that do that get a formal plan out of it. It’s really important to understand what your expenses are going to be, what your income is going to be and to analyze it before you get there. This is not a set and forget it. This isn’t an, “Oh, I’m going to have this, and I’ll be okay.” This is not something that you can make a change then. Your “then” has to be “now,” and you have to be able to predict where you’re going to be 30 years from now.

What does this have to do with physicians?

I mean, physicians have money. Why is it that it’s so relevant? The problem is that most physicians are active-wage employees, and most of them would invest most of their assets in the stock market, or they invest their assets in employer-sponsored retirement plans, which invest in
the stock market. These paper assets are precisely the things that are most damaged and most volatile, and the things that are consumed by assets under management fees. Most physicians rely on professional advice, but their investment options are limited to the financial instrument offered by their plan or their advisor.

What happens is they get this false sense of security, and that false sense of security makes them think that they’re going to be okay until they get to retirement, and by then it’s too late to make a change. There was an AMA study done in 2018, and they asked retired physicians: Do you feel
comfortable? Over half of them were worried about volatile market conditions depleting their savings. 40 percent of them felt like they hadn’t saved
enough, 28 percent said that they started saving too late, and about a third of them realized that their medical expenses were going to be out of control. Nearly three-quarters of all physicians were under duress by the time that they retired, which is almost exactly the same number that’s in the general population of non-physicians.

Physician salaries and income may be high, but their expenses are also high. Physicians’ hyperspecialization in medicine has kept them from understanding the financial world, and that lack of understanding is going to have a huge impact on physician retirement and financial stability.

We went to medical school to care for and improve humanity

We assume that by doing good for others, we would do well for ourselves. Unfortunately, that’s not true. Those financial rules have changed. We have to adapt to this new world – or we’ll die extremely highly educated but broke.

About me

I’m Gurpreet Padda. I’m a physician. I also have an MBA. I’m board-certified in anesthesia. I’m board-certified in interventional pain, and I’m board-certified in addiction, so I have a lot of experience in the medical field. I graduated from the University of Missouri-Kansas City in 1988. I’ve been in both an academic and private practice. I’ve been at a hospital-based practice, and I’ve been in independent medical practice as well. I’ve used insurance-based plans, and I also have a cash-pay practice when we deal with issues associated with cosmetic surgery. I’ve run 11 outpatient clinics. I’ve developed surgery centers for myself, and I’ve developed surgery centers for other people. I have both a medical and a non-medical turnaround specialty.

I started in the medical field after I started in the business world. That doesn’t mean I started a lot later. I started in the business world when I was 16, and
I didn’t go to medical school—a six-year program—until I was almost 18. I’m driven by compliance. I want to figure out what the rules are and I want to make sure I don’t violate those rules, so that’s my personality. That’s how I come to this.

Is Red Pill Kapital right for you?

Are you looking to enhance your financial wealth and truly live the life that you deserve? Are you an accredited investor who’s interested in learning more about passively investing and cash-flowing
commercial real estate? Are you interested in investing alongside us? Because we don’t need your money. What we’re trying to do is do bigger projects with more leverage, and the bigger the project, the less the risk because the leverage improves. We only make money if you make money. If you have any questions, please email me at info@redpillkapital.com and that’s Kapital with a K.

What’s Red Pill Kapital?

Red Pill Kapital is a physician-owned commercial real estate investment and education company. It allows you to invest passively alongside us. We find the property, or we find the investment group. We create and validate their plan. We look at how to improve the cash flow, we negotiate the deal, and we manage and oversee the asset. Your passive investment provides you with an opportunity to earn an income without the 9 to 9 because physicians don’t work 9 to 5. We probably work 6 to 9.

We create a unique business strategy that fits your financial investment goals because we understand the specific needs of physician professionals. I
specialize in turnaround situations. I originally got my MBA in finance, because I was interested in pharmacoeconomics studies, but then, I was applying
those principles – the cost-benefit analytic tools and cost-utility studies – and helping determine rates of return for healthcare. I started applying them to physician care. I had already started my first company when I was at the age of 14, and it was a construction company. I went to medical school and started right before my 17th birthday – I turned 18 in November, and I had started right before. My first year was really when I was 18, and it was a six-year program, so it was combined.

The reality is that early exposure to construction, and dealing with people when I was 14, 15, 16, and then, understanding how the dynamics of human beings are, has made a huge difference, and it’s allowed me to look at things in a little bit different way. I’ve eventually gone on to develop about 2 million square feet of commercial real estate. I’ve owned and operated five restaurants. I’ve got over 30 companies that I’ve worked in as in terms of ownership, and currently, have managed assets of more than $200 million, but I still practice clinically every single day. I practice because I want to practice.
I practice because I love the patients that I take care of. I practice in the urban core, and most of my patients are indigent. Most of my patients are on Medicaid, and I do my medical practice because it’s my calling, but my money is made outside of medicine.

We search for value-added real estate for our passive commercial real estate partners, and we actively manage that investment long-term for a successful exit. We are Red Pill Kapital.
Find us at Redpillkapital.com