Financial advice for a newbie high earner

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Financial advice for a newbie high earner

Postby make_a_better_world » Tue Mar 19, 2013 12:28 am

Dear Bogleheads,

I am finally graduating after 4 years of college plus 11 years of additional training to be a cardiologist starting August 1. I have just signed a contract and will start at 550k salary. I have never had income remotely in the same universe as that, and I am essentially new to investing. In the last several months I have gone through an online course about financial markets and have read some of the investing books that happen to be on the recommended reading list here.

I learn about IRA accounts and then learn this benefit is phased out at my income. This same phasing out occurs with other situations such as passive loss from real estate investment properties. As soon as I learn about how dividends and capital gains are taxed, I read an article that this is all changing in 2013 and may change soon again. I also estimate I will have a tax liability of 187k if I take no deductions. My question is- where can I seek expert counsel for my situation? I mean where specifically. Are there institutions or sources that I can trust? I appreciate any advice.

My info:
Emergency funds: 3 months
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)
Assets: 3k in a traditional IRA
Tax filing status: single
State of residence: Texas
Age: 33
Desired asset allocation: Working on figuring that out
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Re: Financial advice for a newbie high earner

Postby Cash » Tue Mar 19, 2013 6:02 am

I would recommend poking around whitecoatinvestor.com for a while. You're not going to find many tax savings in your income bracket. Will you have an employer-sponsored retirement plan, such as a 401(k) or a 403(b)? You should definitely max that out to save on taxes. Other terms with which you should become familiar: backdoor Roth, tax loss harvesting, tax efficient fund placement, donor advised fund (if you give to charity).

It's really not that difficult to manage your own portfolio, and there's no need to pay someone to do so. The best thing you can do is sock away as much as you can into a few of the funds recommended here (i.e., Total Stock Market, Total International, and Total Bond) and keep expenses low. It's not rocket science, and you'll be fine. There are lots of doctors and other high earners on this site (including the author of White Coat Investor). I'm sure any questions you have can be answered here.
Last edited by Cash on Tue Mar 19, 2013 6:52 am, edited 1 time in total.
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Re: Financial advice for a newbie high earner

Postby Levett » Tue Mar 19, 2013 6:16 am

Obviously, you haven't yet built up a portfolio, but there are at least two reputable advisers often mentioned here who reside in Texas:

Rick Ferri (in the San Antonio area, I think), whom you can send a private message to at this site. Just search for his name at this site.

Scott Burns (I believe he's in Austin now). http://assetbuilder.com/

It's possible they might be willing to provide a consultation.

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Re: Financial advice for a newbie high earner

Postby livesoft » Tue Mar 19, 2013 6:30 am

There are plenty of ways to reduce tax liability. One that comes to mind is to donate $300,000 a year to charity.

Since you asked for financial advice, I would not mention large salaries to anyone ... even anonymously. Sure, we all have an idea of what physicians earn, but still no reason to lay it out there.
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Re: Financial advice for a newbie high earner

Postby hand » Tue Mar 19, 2013 6:30 am

To be precise, you are not phased out of IRA contributions, rather phased out of the immediate tax benefits.
If you're truly starting from scratch, you'll want to make a taxable $5k contribution to your IRA each year, then immediately convert to a Roth IRA in a move called a Backdoor Roth.
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Re: Financial advice for a newbie high earner

Postby kitteh » Tue Mar 19, 2013 7:25 am

I personally have never worked with a financial adviser, but learned to manage my finances myself.

This springs from paranoia. I may mess up (although in decades so far I haven't), but I won't wind up paying exorbitant amounts in fees, or finding my accounts drained, or finding that I owe the IRS zillions and am actually destitute when I thought I was in financial good shape.

If I were in your financial situation, I'd decide what I needed to spend to have a comfortable lifestyle (not extravagant, if you want that, that can wait until you have a lot of money socked away), and save the rest in something "safe" while you learn about what you need to do financially. I would right from the beginning do things that reduced taxes as has been suggested with IRAs.

I will add that (and my apologies for mentioning this) at one point I read that doctors tend to fall for exotic investment schemes that most people would run from and that wound up costing them significant losses. So if it's exotic and you don't understand it (raising thoroughbreds, building a housing complex in Macedonia, a framis mine in Alaska, etc.) or too good to be true...
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Re: Financial advice for a newbie high earner

Postby dhodson » Tue Mar 19, 2013 7:25 am

i dont see any problem with listing of the salary. If everyone knows what he/she makes then its moot anyway.

i also recommend whitecoatinvestor.com

A couple of things, you need to be careful about who advises you. The folks listed above are good but many are not.

Id be sure to acquire good individual own occ disability insurance and an umbrella policy. Avoid any advisor/agent trying to get you to think any form of permanent insurance is a good investment (whole life, universal life in its many incarnations).

While you are figuring out what to do, id just pay off that debt. Your best deductions are likely to come from a retirement plan related to your employment. Id backdoor roth as mentioned as well.
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Re: Financial advice for a newbie high earner

Postby mud » Tue Mar 19, 2013 7:43 am

I'll echo what others have stated here. Take your time lining things up and getting into investments. Getting in is much easier than getting out.

Since you're already used to living on a low salary, the temptation will be to spend way more than is necessary. Sure, it may be necessary to buy a car soon, and to think about disability and life insurance, but no need to blow through everything your first year. Get into habits now that will help you exercise self-control...whether it's auto-investing $XXXX every month into a taxable account at Vanguard, buying a $XXXX CD at Ally every month or just having money auto deposited into a savings account that's not easy to get to. Try to live on 25-50% of your take home pay, and bank the rest in some fashion. That still leaves you plenty to live on. Much easier than living the $500k/yr lifestyle and trying to scale back.

You've worked hard and deserve this reward. Be smart with your money, and it can work for you for many years into the future.
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Re: Financial advice for a newbie high earner

Postby make_a_better_world » Tue Mar 19, 2013 10:02 am

Thank you so much to everyone!

I just checked my benefits summary. My employer offers a 401(k) and a Roth 401(k) through Vanguard. The age limit for withdrawal is set at 65 instead instead of 59.5. After 1 year of employment, I am eligible for employer matching up to 4%. These retirement plans seem much more attractive than the backdoor Roth IRA since I can contribute greater than 5k. Any advice for the 401(k) vs the Roth 401(k)? It seems that if I were to ever lose my job, I could roll the Roth 401(k) to a Roth IRA and then I would at least have access to my contributions. Does that sound right?

I will check out whitecoatinvestor.com and read up on tax loss harvesting, tax efficient fund placement, and donor advised funds. I will avoid the exotic investment schemes and also the more typical market timing strategies. No need to apologize, kitteh. Many physicians are clueless with respect to investing and finance.
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Re: Financial advice for a newbie high earner

Postby WorkToLive » Tue Mar 19, 2013 10:15 am

Workplace retirement plans and IRA (Backdoor Roths) are not mutually exclusive. So long as you have no assets in any exising Traditional IRA, you can contribute $5,500 to a non-deductible Traditional IRA and then convert it to a Roth IRA without any tax implications. This can be in addition to your $17,5000 maximum contribution to your workplace plan.

Congrats on the nice job offer!
Last edited by WorkToLive on Tue Mar 19, 2013 3:40 pm, edited 1 time in total.
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Re: Financial advice for a newbie high earner

Postby Cash » Tue Mar 19, 2013 10:54 am

make_a_better_world wrote:These retirement plans seem much more attractive than the backdoor Roth IRA since I can contribute greater than 5k.


As noted above, they are not mutually exclusive. You should aim to max out your 401(k), a backdoor Roth IRA, AND contribute to a taxable brokerage account (and 529s when/if you have kids).

Any advice for the 401(k) vs the Roth 401(k)? It seems that if I were to ever lose my job, I could roll the Roth 401(k) to a Roth IRA and then I would at least have access to my contributions. Does that sound right?


No. In your tax bracket, you want to go with a traditional 401(k). With a Roth, you pay taxes on your contributions up front at your very high marginal tax rate. With a traditional, those taxes are deferred until retirement, when you will likely be in a much lower tax bracket.
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Re: Financial advice for a newbie high earner

Postby nimo956 » Tue Mar 19, 2013 11:11 am

make_a_better_world wrote:Thank you so much to everyone!

I just checked my benefits summary. My employer offers a 401(k) and a Roth 401(k) through Vanguard. The age limit for withdrawal is set at 65 instead instead of 59.5. After 1 year of employment, I am eligible for employer matching up to 4%. These retirement plans seem much more attractive than the backdoor Roth IRA since I can contribute greater than 5k. Any advice for the 401(k) vs the Roth 401(k)? It seems that if I were to ever lose my job, I could roll the Roth 401(k) to a Roth IRA and then I would at least have access to my contributions. Does that sound right?

I will check out whitecoatinvestor.com and read up on tax loss harvesting, tax efficient fund placement, and donor advised funds. I will avoid the exotic investment schemes and also the more typical market timing strategies. No need to apologize, kitteh. Many physicians are clueless with respect to investing and finance.


You need to also check if your 401k allows for after-tax contributions. Total pre-tax + match + after-tax limit is $51k in 2013 I believe. Let's say your employer match is $3.5k. This means that you can put $17.5k + $3.5k = $21k of pre-tax money into your 401k. You then put an additional $30k of after-tax money into the 401k and contribute $5.5k to a non-deductible traditional IRA. You then roll the $30k into the IRA and immediately convert it to a Roth. This allows you to contribute $35.5k to a Roth IRA each year, paying tax only on the gains.

Your 401k has to allow for this though, not all plans do. There are also limits on how frequently you can roll the after-tax money out of the 401k.

Also check out I-Bonds and EE-Bonds as a way to tax-defer some cash savings that you place in taxable. The max is $10k per year per SSN for each ($20k for just you, $40k for you + spouse, etc).
Last edited by nimo956 on Tue Mar 19, 2013 11:21 am, edited 1 time in total.
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Re: Financial advice for a newbie high earner

Postby PoeticalDeportment » Tue Mar 19, 2013 11:18 am

You should of course max out any tax advantaged space available to you: 401k (+/- profit sharing plan?), backdoor roth, HSA, 529 (if kids are in the picture). After that, I would save cash. Maybe even plan on maxing out the tax advantaged space in December so you can save as much cash as possible early on.

It sounds like you probably have a really great job set up. But there are very few free lunches in this world. For the salary you listed in your post, you will definitely be earning it. You might think you know your partners (bosses early on) pretty well from your experience applying for the job - lots of other people have thought that also. Having a lot of cash on hand would help you be prepared for any number of unfortunate circumstances that doctors find themselves in when they accept their first job (most are a little bit wiser when they accept their second position if the first one didn't work out). Six or twelve months down the road, if you are feeling pretty good about the amount of call you are taking, your relationships with your partners / office staff, etc. then I would start deploying some of that cash to whatever asset allocation you have decided is right for you.

Some employment contracts have non-compete clauses that would make it very expensive to leave. Think relocation expenses, purchasing tail malpractice coverage, the list goes on... And BTW, I would probably drive that toyota for a while longer (I still drive an old civic).

Cash = freedom.
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Re: Financial advice for a newbie high earner

Postby Dave76 » Tue Mar 19, 2013 11:20 am

$550k. So, that's why I can't get an affordable health insurance plan. :oops:

PM Larry Swedroe. He is well-liked and respected on this forum.
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Re: Financial advice for a newbie high earner

Postby thegoodlife » Tue Mar 19, 2013 1:15 pm

make a better world;
Congrats on the job! I have no advice on investing but hope you don't mind me taking this in a different direction. I enjoy listening to Dave Ramsey on the radio and constantly hear people calling in with very high income but over $200,000 in student loan debt plus CC and car loans - to these people, their income is irrelevant because of the amount they owe. You are in an INCREDIBLE position with your very, very low debt but don't let that change. Imagine how different things would be in 5 years if you had an $80,000 car loan plus a couple million dollar mortgage. Although Dave's books are for people who are in debt, reading one might help someone avoid mistakes and never get into debt. I bring this up because, in my opinion, what you choose to invest in is a very small part of the equation - the bigger part is to make sure that you manage your money so you can maximize the amount you invest. I think the reported conversation between Groucho Marx and an investor sums up what I am trying to get at : When asked what he invested in, Groucho responded "Treasury Bills" to which he was told "you can't make money in T Bills", Groucho said "you could if you had enough of them".
Please do not read this and be offended. You sound like you are doing all the right things - low debt, 3 month E fund, 14 year old car, taking an active part in researching investment options... Take the others advice on lowering tax and where to invest but just make sure you invest in something and you will have enough "T Bills" to live the good life.
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Re: Financial advice for a newbie high earner

Postby make_a_better_world » Tue Mar 19, 2013 4:28 pm

Ok so I can see the overwhelming consensus is to contribute maximally to both a 401(k) and a backdoor Roth (plus save cash).

WorkToLive wrote:
So long as you have no assets in any exising Traditional IRA, you can contribute $5,500 to a non-deductible Traditional IRA and then convert it to a Roth IRA without any tax implications.


I have ~3k in a Traditional IRA now. Does this mean I should convert my existing account to a Roth now? Can I just set up a new Traditional IRA with a different institution and convert that one?


Nimo956, I will look into that. I only have the benefits summary immediately available and not the details of the plan. An annual contribution of 35.5k into a Roth seems amazing, especially when I will likely have a taxable account for investment anyway.

PoeticalDeportment, there is indeed no free lunch with my job. I will be on call every third night on average and the practice will be busy. The people seem to be of good integrity, so hopefully it will work out.

TheGoodLife, my primary goal is to invest to create additional sources of income and security. I moonlight a little for extra cash and one of the guys I work with is a general surgeon in his late 60s. He was a multi-millionaire and pissed all his money away through lifestyle and a divorce. Right now he is close to broke.

Once again, I want to say thanks to everyone.
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Re: Financial advice for a newbie high earner

Postby Valuethinker » Tue Mar 19, 2013 4:48 pm

make_a_better_world wrote:Dear Bogleheads,

I am finally graduating after 4 years of college plus 11 years of additional training to be a cardiologist starting August 1. I have just signed a contract and will start at 550k salary. I have never had income remotely in the same universe as that, and I am essentially new to investing. In the last several months I have gone through an online course about financial markets and have read some of the investing books that happen to be on the recommended reading list here.

I learn about IRA accounts and then learn this benefit is phased out at my income. This same phasing out occurs with other situations such as passive loss from real estate investment properties. As soon as I learn about how dividends and capital gains are taxed, I read an article that this is all changing in 2013 and may change soon again. I also estimate I will have a tax liability of 187k if I take no deductions. My question is- where can I seek expert counsel for my situation? I mean where specifically. Are there institutions or sources that I can trust? I appreciate any advice.

My info:
Emergency funds: 3 months
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)
Assets: 3k in a traditional IRA
Tax filing status: single
State of residence: Texas
Age: 33
Desired asset allocation: Working on figuring that out


1. make sure you have Long Term Disability in Place, own occupation. Probably at least c. $150-200k pa. Say 50% would be ideal. Maybe you already do? If you go for a 90 or 120 day exclusion period that should significantly lower your premiums.

2. term life insurance to cover your dependents (if any). I keep thinking of those 'wives of 9-11' who fought the government when they were offered I think $1m to terminate all legal claims. As more than one pointed out, if you were married to a guy who made $350k a year, it's not greedy to turn down $1.0m (I don't remember the exact number).

If you have dependents, it's a big number, I would say you are in for at least $2m-$3m at a guess. 20 year term is cheap though (hopefully by the end of that time your wealth will be sufficient that your need for insurance is largely irrelevant.

3. raise cash reserves to at least 6 months living expenses

4. having done 1-3, then pay off the student loan (exception, if you were buying a home or condo in the next 12 months or so).

5. probably buy a new car. Aim for around $30k? That will get you, I think, a nice enough Lexus or high end Toyota. Anyways you will be doing that soon enough-- cars don't last forever.

6. then it's about when you buy a house, and what your investment portfolio is. Buying a house or condo can wait a couple of years *unless* you've got a kids issue. It's worth waiting.

But you probably are aiming at the $500-$1m bracket when you do finally buy (I don't know your area, that's a guess). The whole key with housing is not to move too often (if necessary, renovate and extend rather than move). So you are going to want to buy a decent house in a good neighbourhood (but what counts as 'good' changes as soon as kids are in prospect). So you'll need at least $200k in cash. If you are buying a condo then less so. But at least 20% down (and a clear plan to pay off within 10 years--do not get too ambitious on housing).

The main thing about where you rent (besides being quiet) is close to work, given the hours you will work, on call etc.

7. investing?

If your hospital has a pension plan, make sure you are in it.

Buy as much ibonds as you are allowed every year ($10k). Seems like nothing now, in 20 years it will be a useful chunk of change, probably pay for the first term at Harvard for your daughter ;-).

To be honest, you could do a lot worse than 60% stocks/ 40% bonds. Bonds including CDs (a ladder-- you can hold your house deposit in here, too). A 'one decision' Vanguard balanced fund is not a bad idea.

As long as you stay committed to saving say $100-200k pa on that income, in 10-15 years time you'll be in a position to basically choose your own career path-- teaching at a medical school, downshifting etc. Big thing that will hit you is kids, private schools, house in the best neighbourhood etc.

You could be in a position to retire in your mid 50s.

An old friend of my father's was a financial planner to medical people. He told my Dad many of his clients kept working much longer than they wanted to, because of lifestyle-- new cars, fur coats for the wife, etc.

The worst mistake you can make is hanging around a lot of high spending doctors. You will hear:

- about how they are spending money but NOT about their huge debts to do it

- about really clever investment ideas that 'financial advisers' have sold them-- oil & gas partnerships, real estate limited partnerships, private equity, hedge funds, structured products

Believe me, William Bernstein (a neurologist) takes you through it, so does Larry Swedroe (his books are a good read on 'alternative' investing 'the good, the bad and the ugly'). People like Merrill Lynch train their advisers to sell to the likes of you, and make huge fees from it for indifferent (or even disastrous) performance.

Doctors, and other professionals, are soft targets for the financial advice industry (I exclude here reputable advisers like Swedroe and Ferri, that make use of things like DFA funds, and fully acknowledge the lessons of modern academic finance research). Because doctors are very smart, have paid their dues, and are easily lured by notions like 'avoiding taxes' and 'keeping your own money' and 'high returns' and 'privileged investors'. But they are not finance people.

Also I imagine in medicine you learn to tell the truth: to your fellow clinicians, to your patients and their families. Professional ethics. Wall Street operates by a different moral compass-- it is all about the bottom line-- the contribution each individual makes to the firm, or he is out.

the Michael Lewis article about DFA, about a financial adviser to the stars in Hollywood, who finally 'saw the light' is still out there, it was in Portfolio magazine (defunct).

http://upstart.bizjournals.com/executiv ... l?page=all

I think this is it. Think of yourself as the deer in the hunter's sights on this one, and read the article as a potential prospect.
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Re: Financial advice for a newbie high earner

Postby katnok » Tue Mar 19, 2013 6:00 pm

livesoft wrote:There are plenty of ways to reduce tax liability. One that comes to mind is to donate $300,000 a year to charity.

Since you asked for financial advice, I would not mention large salaries to anyone ... even anonymously. Sure, we all have an idea of what physicians earn, but still no reason to lay it out there.


+1. Certainly, most physicians do not make anywhere near 550K. Most Pediatricians make less than 1/3rd of this salary.
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Re: Financial advice for a newbie high earner

Postby dimdum » Tue Mar 19, 2013 6:17 pm

There are multiple site will will give you median salary for medical professional.
I know its a hard 15 years of studying and working, well deserved salary.

Buy a new car, you deserve it but only when you have max out 401k and have cash for entire payment.
Stay away from any advice which saves you taxes by investing in exotic things.
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Re: Financial advice for a newbie high earner

Postby ziszew » Tue Mar 19, 2013 7:15 pm

make_a_better_world wrote:<snip>
My question is- where can I seek expert counsel for my situation? I mean where specifically. Are there institutions or sources that I can trust? I appreciate any advice.

My info:
Emergency funds: 3 months
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)
Assets: 3k in a traditional IRA
Tax filing status: single
State of residence: Texas
Age: 33
Desired asset allocation: Working on figuring that out


Many others have already posted some good info, but I'll add my .02 and lessons learned.

Go to the whitecoatinvestor.com for some physician specific advice when it comes to insurance, taxes, student loans etc. It's well regarded around here and free to you.

Read the book "Millionaire Next Door" by Stanley & Danko. For someone in your peer group it will be a helpful reminder that appearances (car, house, club, etc) aren't indicative of wealth, just spending habits and make it easier to stay the course when it comes to saving, investing, and living well below your means.

You most likely need a good accountant/financial planner than financial advisor; I say this because decisions involving insurance (given your liability exposure) and taxes, etc. are going to have more of an impact on your finances than asset allocation. It's not easy to find one you trust, but one thing I've always found helpful is figuring out who they are working for; if there is any commission involved, it's not you. Find someone fee-only, talk to more than one before you decide, and don't go on a single recommendation (even if it's a good friend/family).

As for specifics, I'd personally be more comfortable with:

-Spending less, saving more (my wife and I aim to save at least 50% of take home every year)

-emergency fund of at least 6 months

-Make sure your insurance is absolutely sorted (disability, liability, umbrella, etc). Given the fact that you're single, no dependents (assumed), and minimal debt life ins. is less of a concern right now, but if you take on a family/large debt that changes the need for it. Remember that the agents work for the insurance company, not you, so spend the time to read the fine print, ask questions here, and talk to your fee-only planner/advisor that is qualified to do so.

-max out the 401(k) (traditional given your marginal bracket) and backdoor Roth every year; bite the bullet and convert the IRA to Roth (taxes paid from cash, not withholding) and do so every year, especially given the 4% match and your salary (you'll get a "free" dollar-for-dollar match up to the maximum contribution every year)

-A Lazy Portfolio using the tax efficient placement found on the Wiki (you shouldn't have enough tax sheltered space each year to cover it all, if you do you're not saving enough) substituting tax-exempt bonds for total bond market once you've filled up your sheltered space with it.

-Remember that you (and your career) are your most valuable asset; spend your time focusing on that with continuing education, etc and maybe 15 minutes/week on your "asset allocation"; a rebalance once a year, making sure 401k contributions are happening, etc. will be more than adequate and any of the above mentioned lazy portfolios will mean you're getting a very good return (and better than any co-worker who starts a sentence with "my broker/advisor put me in...")

Congrats on the hard work paying off, now the key is trying to make sure a decade or two down the road you're working because you want to...
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Re: Financial advice for a newbie high earner

Postby ram » Tue Mar 19, 2013 7:25 pm

All good advice above.
At that kind of salary you will have to pay substantial tax. Dont believe anybody who tells you otherwise and has some 'tax saving' investment strategy to sell to you.
Stay away from the friendly investment adviser who came to you recommended by your partner and has a 'unique' tax saving investment that is only available to a 'privileged few' and is 'not commonly known'

Look into 457 plan from your employer. Not all employers have it. Carries higher risk but probably worth it at your income level . A legitimate way of saving tax. Put not more than 10% of your total investment in this plan.
- Another MD
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Re: Financial advice for a newbie high earner

Postby ziszew » Tue Mar 19, 2013 7:36 pm

make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)
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Re: Financial advice for a newbie high earner

Postby hicabob » Tue Mar 19, 2013 7:41 pm

ziszew wrote:
make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)

Having driven Toyota Tacoma's and Mercedes E-class among others, he does have a point. Salespeople in particular fawn over you if you drive up in the benz. It's quite interesting.
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Re: Financial advice for a newbie high earner

Postby Raymond » Tue Mar 19, 2013 7:59 pm

Congratulations on the new position!

I have nothing to add to the excellent advice above, but as my wife (an ER nurse) said when I told her of your thread:

"If [make_a_better_world] is a single straight guy, he probably knows that almost every unmarried female (and probably some of the married ones too) in the area that knows of his situation is setting her sights on him and wants to become 'Mrs. Doctor.'"

Valuethinker mentioned the predatory "financial advisers" in his post above. Be aware that's not the only shark tank you're swimming around in with a chunk of raw meat strapped to your back :twisted:

-----

hicabob wrote:...Having driven Toyota Tacoma's and Mercedes E-class among others, he does have a point. Salespeople in particular fawn over you if you drive up in the benz. It's quite interesting.


I'll bet - as mentioned by Stanley and Danko, people with obvious so-called "badges of success" like a Mercedes-Benz are more likely to spend money on similar status products.
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Re: Financial advice for a newbie high earner

Postby 6miths » Tue Mar 19, 2013 10:50 pm

ziszew wrote:
make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)


So where does one draw the line? The key is not to get caught up in the 'lifestyle'. Personally, I wouldn't and don't go for the fancy car, especially early in your career. I have seen many of the new MDs who have joined our practice go in for the new MB GL450 or the 7-series BMW but to what end. My 7 year old entry level Acura still looks brand new and was paid for the day I drove it off the lot (it was a demo). Sure you've got a great salary but it cost you 13 years of being out of the workforce and now you only have maybe 25 years until you want to pack it in or at least scale back. I don't know too many MDs who really want to be working at 60+ and I know several who haven't had a choice about leaving before that. By keeping your spending under control you will have much more flexibility when you get into your 50's and decide that maybe you've had enough or need a break or whatever. I would agree with much of the advice given. Head on over to whitecoatinvestor.com, read some of Stanley's books (including 'Stop Acting Rich: And Start Living Like A Real Millionaire') and of course books on the reading list here. Sure it may be time for an upgrade on the car but get the certified used or whatever because as good as Toyota's are, maybe 14 years is pushing it (I salute you though!) and it is time and not because you care that much what others think. Be great at what you do and treat patients with respect and you will never find yourself wanting for patient volume. And you never know, alot more people than you think may be impressed that you haven't gone overboard on the car than you might think. One of the surgeon's I respected most for both his skill and compassion drove a Ford Mustang beater into the ground despite being 10 years+ in practice and I think I respected him all the more for it. Certainly, driving an expensive car wouldn't have made him a better surgeon. Good luck!
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Re: Financial advice for a newbie high earner

Postby stoptothink » Tue Mar 19, 2013 11:26 pm

ziszew wrote:
make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)


I have an uncle who drives a beat up 30yr old Winnebago to work, yes a motorhome. Considering he is an orthopedic surgeon who makes at least what the OP does, I don't think his choice of vehicle has negatively affected how his patients view him.
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Re: Financial advice for a newbie high earner

Postby ziszew » Tue Mar 19, 2013 11:28 pm

6miths wrote:
ziszew wrote:
make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)


So where does one draw the line?
<snip>

Good question (and no need to drop the gloves or grab the sweater given the Leafs avatar :) )

To be frank, it's a balance. One thing my wife and I have gotten a kick out of over the last decade is watching the subtle comments/questions from friends/family/co-workers go from "you're not making as much as me" to "how much are you making?" People are now realizing that we've always lived well below our means, and they seem determined to try and figure out how much below that is....

I'm not suggesting he go buy a 90k car, but I think (sadly) that there's a difference between a "young" surgeon climbing into a beater and an established surgeon getting into a 10 year old luxury brand. Is it logical? No. But right now it makes sense to prudently "play the game" by buying an off-lease luxury car to "prove" he's "valued". I always think of Dr. Seuss's "Sneetches on Beaches" in this situation (I recently learned it's supposedly about race, not capitalism, but I think the analogy still works), but in his case it probably makes sense to trade up given the age of his car and current situation.

(to be frank, if I really were the OP, I'd be waiting for the 328d Sportwagon from BMW given the 30+mpg avg, interior space of a compact suv, handles like a 3-series sedan, first 3 years of maintenance paid for, below-inflation financing)
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Re: Financial advice for a newbie high earner

Postby Noobvestor » Tue Mar 19, 2013 11:31 pm

1) Don't let your lifestyle grow by more than a preset amount you feel it should, within reason (e.g. I want it to grow 20% now so I can do X, Y and Z I couldn't before).

2) Max out everything you can for tax advantages, including I Bonds, EE Bonds, health savings accounts, etc..

3) Tax-efficiency is going to be hard, regardless - focus on muni bonds (federal tax exempt) and if you're in a high-state-tax location consider treasuries or TIPS in taxable (state-tax exempt).

4) Consider insuring yourself as well as possible so that it isn't all for naught if you are suddenly unable to work

5) Read, read and read some more - then read some more. Per other comments, a lot of people will now try to part you from your money. They are generally called 'financial advisors'
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Re: Financial advice for a newbie high earner

Postby LFKB » Tue Mar 19, 2013 11:36 pm

1. Max your 401k
2. Back door Roth
3. Pay off debt
4. Buy a new car (maybe $30-$40k)
5. Save for a downpayment in a high yield savings (Capital One, formerly ING) acccount or in short-term treasuries. Assuming you want to buy a home soon.
6. Start investing in your taxable accounts

Invest on your own. Learn about tax efficient fund placement on the wiki. The short of it is you'll likely want to determine your asset allocation and put your bonds and RE in your tax deferred (401k and Roth) accounts and your stocks in your taxable accounts. You'll also likely want to invest in tax free muni bond funds with your bonds held in taxable accounts. Spend a few weeks around here and you'll figure it all out.
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Re: Financial advice for a newbie high earner

Postby stoptothink » Tue Mar 19, 2013 11:46 pm

ziszew wrote:
6miths wrote:
ziszew wrote:
make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)


So where does one draw the line?
<snip>

Good question (and no need to drop the gloves or grab the sweater given the Leafs avatar :) )

To be frank, it's a balance. One thing my wife and I have gotten a kick out of over the last decade is watching the subtle comments/questions from friends/family/co-workers go from "you're not making as much as me" to "how much are you making?" People are now realizing that we've always lived well below our means, and they seem determined to try and figure out how much below that is....

I'm not suggesting he go buy a 90k car, but I think (sadly) that there's a difference between a "young" surgeon climbing into a beater and an established surgeon getting into a 10 year old luxury brand. Is it logical? No. But right now it makes sense to prudently "play the game" by buying an off-lease luxury car to "prove" he's "valued". I always think of Dr. Seuss's "Sneetches on Beaches" in this situation (I recently learned it's supposedly about race, not capitalism, but I think the analogy still works), but in his case it probably makes sense to trade up given the age of his car and current situation.

(to be frank, if I really were the OP, I'd be waiting for the 328d Sportwagon from BMW given the 30+mpg avg, interior space of a compact suv, handles like a 3-series sedan, first 3 years of maintenance paid for, below-inflation financing)


I've had my fair share of surgeries and never once have I seen my surgeon get in his car. Maybe other doctors judge him, but then again maybe my employees who make far less than I do and drive more expensive cars do too. He should drive whatever he wants, but what tangible benefit to his career does "playing the game" by driving a nice car provide?
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Re: Financial advice for a newbie high earner

Postby pingo » Wed Mar 20, 2013 12:06 am

nimo956 wrote:You need to also check if your 401k allows for after-tax contributions. [...] There are also limits on how frequently you can roll the after-tax money out of the 401k.


Be advised that the plan must allow after-tax contributions and in-service withdrawals. It might allow the first, but not the second. Here are 4 links talking about after-tax contributions: here, here, here and here.

If you are allowed to make regular in-service withdrawals of after-tax contributions to your employer plan, you can have them directly rolled over to your VG Roth account and they will be tax-free forever after. They do not affect your Roth IRA contribution limits.
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Re: Financial advice for a newbie high earner

Postby ziszew » Wed Mar 20, 2013 12:11 am

stoptothink wrote:I've had my fair share of surgeries and never once have I seen my surgeon get in his car. Maybe other doctors judge him, but then again maybe my employees who make far less than I do and drive more expensive cars do too. He should drive whatever he wants, but what tangible benefit to his career does "playing the game" by driving a nice car provide?


To be frank, I've never seen any of my surgeons get into their cars either; that said, they were all quite established in their careers. Would seeing them get out of a 14 year old toyota have swayed my opinion? No, but they also rebuilt the knees of a few New York Rangers before doing mine.....

My assumption was the OP wanted advice, some of that included the fact that he owned a 14 yo Toyota. Will a luxury car provide dollar-for-dollar career advancement? No way to know. Buy a Toyota for all I care; my personal experience is that in his soon-to-be-peer group there is an "expected minimum". Can he buck the trend? Sure. Is it worth it? Maybe, although I would argue it's easier to "stick it to the man" once you've proven talent for a few years. The OP can go buy a used Hyundai and be happy and successful for all anyone knows. Given the current financing rates, buying an off-lease Lexus isn't frivolous and if he actually enjoys cars in any way may be "worth" it.
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Re: Financial advice for a newbie high earner

Postby thebogledude » Wed Mar 20, 2013 12:26 am

There was a heart surgeon (is that the same as a cardiologist?) driving a maserati on NY Med. The car was a metaphor for the way he operates - fast and good (those were his words). That's the reality series on ABC.

No one mentioned buying a house but I think it might be a wise investment. There was talk of changing the mortgage interest deduction for this coming tax year so I'm not sure if that is deductible or not.
Last edited by thebogledude on Wed Mar 20, 2013 8:55 am, edited 2 times in total.
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Re: Financial advice for a newbie high earner

Postby ziszew » Wed Mar 20, 2013 12:43 am

thebogledude wrote:<snip>
No one mentioned buying a house but I think it might be a good investment. There was talk of changing the mortgage tax deduction for this coming tax year so I'm not sure if that is deductible or not.


Given his age and status (single), buying now may (or may not) be a good idea. True, rates and prices are low, but the OP has no idea what their "needs" are given the fact they listed their status as single.

Until they are in a serious relationship, my usual advice is to hold off buying (unless they can guarantee not needing to move for at least five years). My wife and I were married in our twenties; the best financial decision we made was not buying for 10 years until we found the closest to a "forever" place we could (with great rental opportunity should that not be the case)
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Re: Financial advice for a newbie high earner

Postby Valuethinker » Wed Mar 20, 2013 7:33 am

Given comments here, the main financial risks to OP are:

- inability to earn in chosen profession -- LTD insurance *essential*, life insurance necessary if dependents

- divorce - not much can be done about that (AFAIK you can protect assets *going into* a marriage, but not accumulated during a marriage?)

*everything* says defer house purchase at least for a couple of years-- build up some assets first.

Car is relatively open, but better a Lexus on a lease (knowing you can rethink in 3 years) than buying a top of the line Merc or BMW (high cost, high depreciation). I do have friends (very frugal friends) who lease Mercedes on very low rates-- competitive with buying a Toyota (their previous car) unless you plan to own for 10 years. And to be realistic, OP probably won't own their next car for 10 years.

Just remember, and contrary to how many doctors think about finance. Paying tax is not the worst thing that ever happened to a high earner. It's important to maximize tax free savings/ tax deferred savings (eg retirement plans). But paying tax on investments is not the worst thing that ever happened vs. making bad investment choices which pay high fees and give lousy returns (I speak from personal pain ;-)).

'Not paying tax' is how many a financial adviser lures affluent doctors etc. into bad investments.
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Re: Financial advice for a newbie high earner

Postby TRC » Wed Mar 20, 2013 7:39 am

Wow! That's amazing. Congrats, sounds like a very long journey is about to pay off.

My biggest piece of advice is to live below your means....well below your means. If you lived off ~75k per year and invested the rest, you could literally be in a position to retire in 10-15 years.
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Re: Financial advice for a newbie high earner

Postby make_a_better_world » Wed Mar 20, 2013 9:26 am

I can't thank all of you enough. I have made a Word document with many of the things mentioned in this thread to seriously look into.

For setting up the backdoor Roth- if I have a traditional IRA now with 3k in it, what should I do about this account? I have not contributed anything for 2013.
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Re: Financial advice for a newbie high earner

Postby stoptothink » Wed Mar 20, 2013 10:45 am

ziszew wrote:
stoptothink wrote:I've had my fair share of surgeries and never once have I seen my surgeon get in his car. Maybe other doctors judge him, but then again maybe my employees who make far less than I do and drive more expensive cars do too. He should drive whatever he wants, but what tangible benefit to his career does "playing the game" by driving a nice car provide?


To be frank, I've never seen any of my surgeons get into their cars either; that said, they were all quite established in their careers. Would seeing them get out of a 14 year old toyota have swayed my opinion? No, but they also rebuilt the knees of a few New York Rangers before doing mine.....

My assumption was the OP wanted advice, some of that included the fact that he owned a 14 yo Toyota. Will a luxury car provide dollar-for-dollar career advancement? No way to know. Buy a Toyota for all I care; my personal experience is that in his soon-to-be-peer group there is an "expected minimum". Can he buck the trend? Sure. Is it worth it? Maybe, although I would argue it's easier to "stick it to the man" once you've proven talent for a few years. The OP can go buy a used Hyundai and be happy and successful for all anyone knows. Given the current financing rates, buying an off-lease Lexus isn't frivolous and if he actually enjoys cars in any way may be "worth" it.


So, to be clear, you are advising him that "keeping up with the Joneses" is a good career move? Tomorrow at my county health services advisory committee (comprised of physicians, dentists, hospital administrators, and I with a PhD in global health) meeting I'm going to go ahead and ask the rest of the board if what car I drive was a factor in my appointment or if they look down on me because I drive the least expensive car in the entire parking lot, even though I am one of the most highly compensated employees in my organization. If he enjoys cars, yes he should absolutely purchase a nice car because he has earned it and can clearly afford it without compromisng his financial situation; I am going to disagree with the idea that purchasing a new vehicle is in any logical way an investment in his career and that it will gain him respect from his peers.

There isn't anything wrong with nice cars, just not the kind of advice I expected to see given on this board.
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Re: Financial advice for a newbie high earner

Postby bornloser » Wed Mar 20, 2013 10:54 am

Welcome and congratulations on finishing specialty training with very little debt (that low debt burden is actually amazing). Now the bad news. You will now be catapulted into the highest fed tax bracket and your fed tax burden alone will be around 150-170k. More bad news, your friends that are engineers and accountants that started saving at age 22 have kicked your financial butt all over the place and have such a large head start on you via our old friend "compounding" that you are going to literally have to shovel large amounts of the 550k salary to catch up. And the guy right out of high school who works for the city for 30 years with a COLA'd pension, well just plan on working a long time to catch up with him. More bad news, you feel invincible now even after working years with little sleep and excess stress....you will not feel this way 15 plus years into practice. There is a very real chance that after working at a racehorse pace for another 15 or so years you will want to retire or at least leave medicine. So I would echo what other wise posters have said, read, read, and read some more (check out the recommended list), save, save and save some more, live modestly and drive another Toyota (yeah man splurge a litle and get a 4 runner) forever. And check back in 15 years and tell us of your success!

PS: Muni's and I bonds are your friends. You absolutely MUST max out your 401k at 51k and backdoor Roth ever year.
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Re: Financial advice for a newbie high earner

Postby BolderBoy » Wed Mar 20, 2013 10:55 am

make_a_better_world wrote:For setting up the backdoor Roth- if I have a traditional IRA now with 3k in it, what should I do about this account? I have not contributed anything for 2013.


You'll take a tax hit in the short-term, but you can do the max tIRA contribution this year, then...

I would convert the ENTIRE tIRA to a rIRA this year, so that you have no tIRAs of any sort left on Dec 31, 2013 (but leave the empty account open - Vanguard will allow this, for example). Your income is going to be so high that you will not qualify for any deductible tIRA contributions going forward so there is nothing lost in doing this and the tax you'll pay on the Roth conversion this year is insignificant when compared with the backdoor Roth conversions you can do going forward.

Then, starting on Jan 2, 2014 do the backdoor Roth conversion trick that others have suggested. Repeat every year on Jan 2.
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Re: Financial advice for a newbie high earner

Postby Epsilon Delta » Wed Mar 20, 2013 11:19 am

make_a_better_world wrote:For setting up the backdoor Roth- if I have a traditional IRA now with 3k in it, what should I do about this account? I have not contributed anything for 2013.


If the $3000 was a contribution was for 2012 or 2013 you have many options. But if it was from 2011 or before you can either roll it over to a 401(k) or convert it to a Roth, paying taxes on it as 2013 income.

Note that you have till April 15th 2013 to make a non-deductible IRA contribution for 2012. Once tax day passes this space is gone forever. You can and probably should use this to do a backdoor Roth contribution. You can also do a backdoor contribution for 2013.
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Re: Financial advice for a newbie high earner

Postby investingdad » Wed Mar 20, 2013 11:23 am

There's so much good advice above my post that I won't try to add to any of it. I'm one of those almost-40 engineers that has been investing since 22, but I'm pretty sure that a 500K salary coupled with a disciplined approach to investing will kick MY butt soon enough (two comma club or not).

So I'll just say this...CONGRATS!!!

That is a wonderful salary and my guess is that you've earned it.

[ok - some quick math using the SIMPLEST of assumptions]

Finding a way to invest 150K a year of your 500K salary at 6% will give you a $6 million net worth by 53, a nice 20 year career. I'm pretty sure a handful of Index funds can get you there.
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Re: Financial advice for a newbie high earner

Postby dhodson » Wed Mar 20, 2013 11:23 am

i personally wouldnt recommend buying an expensive car in order to appeal to either patients or colleagues but i cant deny that it likely affects some of their perceptions. The same is true for putting hard wood floors in the waiting area. For some patients they interpret such things in a way that is to your benefit.

I should add there are also patients and colleagues who will have the exact opposite view typically meaning they feel they pay too much.

Impossible to know what percentage is in each camp. It wouldnt make me buy a more expensive car.
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Re: Financial advice for a newbie high earner

Postby TroutMD » Wed Mar 20, 2013 1:18 pm

I am an EM physician and my wife is a professional; there are several docs on here. I am 32 and have been out 1.5 years.

BIG TIME words of wisdom I have gathered and tried to live by:

Rent first, buy later and DONT BUY TOO MUCH! If you are 'returning home' or going to an area that you have prior history with, then maybe buying now is ok.

Maxmimize every retirement avenue you have.

DONT spend too much on a car(s), lake house, etc. Have nice things and dependable vehicles; dont go overboard.

Buy a life insurance policy for 1-2 million, espically if you have a family. Even if you dont, buy it for your parents. You are talking less than 2K for 2million term insurance.

Buy disability insurance. Dont fall the hype of needing to match you physician pay. I have DI with a benefit of 10K/month and thats not taxed. It costs around 4K per year.

Take at least one nice vacation a year, and maybe two.

Dont forget, even after maximizing all your retirement accounts, you can STILl save more in taxable accounts. I have heard people say "Well, I maxed my retirements and have money left over so I'm buying a.. boat, private jet charter, etc"

Overall, do not get in the position where you have to work. Live well below your means and try to enjoy work. MANY doctors work to live, and after 20 years, they are still in debt to their ears. That lifestyle is not worth it. At our incomes, we can still live VERY WELL compared to most Americans and can do it very comfortably for the rest of our lives...

Lastly, follow the Bogleheads approach! Steer clear of financial advisors, we are Whales to them and they will tempt you with trips, tickets, dinners, etc. A per hour advisor as listed above is ok, but I really dont think you need that. Spend some hours reading on here and learn as you go...

Good Luck!
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Re: Financial advice for a newbie high earner

Postby rainyday1 » Wed Mar 20, 2013 4:06 pm

Congratulations on the new job! Just a couple of thoughts for you - pretty much echoing what others have said.

Keep your lifestyle as low as possible while you're single and even once you're married before the kids. We were always too tired to go out and spend any of the money we were making. Make your life simple and easy so that you can relax in your downtime. Save and invest the difference. We have very minimal tax-advantaged space (just a 401k), so all of the rest of our investments are in a taxable account with 4 funds. You may have more tax-advantaged options. In the taxable account, we have

total stock market
total international
wellesley (I would have preferred total bond market)
emerging markets

Every extra cent I can save goes into these funds. We have been doing this for about 8 or 9 years now with a similar income to yours. All of a sudden, this week I ran our numbers and we're worth over 3 million!! I finally feel like all of our work has paid off. We have watched friends buy fancy cars, mcmansions, fabulous vacations and been a little disheartened over the years, but now all the sacrifice is starting to feel REALLY worth it. We still keep our expenses pretty low, splurging just a little on things we enjoy, like eating out. With 3 kids in the mix now, it definitely cuts down on our saving, but not by much.

On the car issue, if it's me, I might get something reliable but cheap. You're already going to have a target on your back for people wanting a piece of your money. Maybe if they see you driving a beater, they'll move on to the next victim...

Congratulations! Figure out what splurges you would really enjoy and spend a little on them. Save the rest and you'll have a huge nest egg in no time! Avoid a high-maintenance wife as well... maybe that's the best reason for driving the toyota a little longer. You don't want to attract the wrong kind of future spouse... :sharebeer
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Re: Financial advice for a newbie high earner

Postby kitteh » Wed Mar 20, 2013 5:51 pm

ziszew wrote:
I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?


I have no idea what kind of cars my doctors drive. How would I know that unless I'm their neighbor? And one could as easily say, there's a doctor making a mint doing unnecessary stuff. I would get a car he feels comfortable with and likes when he thinks it's time to get another car.
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Re: Financial advice for a newbie high earner

Postby kitteh » Wed Mar 20, 2013 6:04 pm

Just a couple of additional notes. I don't know how much input you'll have to the practice you're joining, but:

Someone mentioned hardwood floors in the office. My old cardiologist's office had a waiting room furnished like a living room. Yes! Comfortable upholstered chairs, a real rug, coffee tables scattered about. My blood pressure used to drop about ten points just walking in, it felt like. And please, no inescapable television or piped in music, that makes it impossible to think about what the patient wants to discuss with the doctor or to relax if they're wigged out.

You mentioned being on call every few nights. My internist's practice has an electronic records system where each doctor has access to the complete records, including test results for each patient. So if you get a phone call at 11pm, you have all the information at your finger tips. A heck of a lot better than the patient trying to remember what's important.
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Re: Financial advice for a newbie high earner

Postby DTSC » Wed Mar 20, 2013 8:58 pm

ziszew wrote:
make_a_better_world wrote:<snip>
Debt: 30k student loan at 2.9% interest, no other (I've rented apartments, I've had my car for 14 years- gotta love Toyota)


I forgot to mention: Sadly, there is a little to "playing the part" when it comes to showing the world your "success". For many people who don't understand, watching their surgeon get into 14 year old Toyota doesn't say "wow, he's smart with his money" but rather "holy crap he's not good enough to afford a new car." Given your like of the Toyota brand, might I suggest a nice off-lease Lexus to "prove" how "good" you are?

edit: as luxury brands go the reliability and running costs are quite good (Acura also works but the recent "beak" styling isn't doing it for me personally)



If I saw my surgeon driving off in a Mercedes convertible, I'd be worried whether I really need the surgery he recommends, or that he just wants to be able to make his next car payment.
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Re: Financial advice for a newbie high earner

Postby ziszew » Wed Mar 20, 2013 9:43 pm

stoptothink wrote:<snip>
So, to be clear, you are advising him that "keeping up with the Joneses" is a good career move?

<snip>

I am going to disagree with the idea that purchasing a new vehicle is in any logical way an investment in his career and that it will gain him respect from his peers.

There isn't anything wrong with nice cars, just not the kind of advice I expected to see given on this board.


To be clear, no. In my first response I emphasized saving and investing (along with some links to reading, one book in particular about not trying to keep up with the Jonses) which seems to have been lost in your (multiple) replies to my later post that he consider replacing his fairly old car (using the word "sadly") this once with a less old one.

I didn't say it's a good investment or that it will win the respect of his peers, just a personal observation, based on our experience not even owning a car for almost the last decade with a "highly compensated" wage earner at a large institution (not in NYC where forgoing car ownership is more common), that as the unknown "new" guy it might make things easier and keep the focus off of "why he can't afford decent car." Then again, it might not. Thinking on it, the luxury brand suggestion wasn't necessary, but replacing it with something more recent won't hurt. Once he's established his brilliance, he can start sleeping in his Winnebago in the parking lot if he feels like it...

Also, he can keep driving his Toyota for another 14 years and continue to be highly successful. The beauty of my advice is that it can be ignored, but please don't twist it into something else entirely. I think it's clear that you disagree with that one piece and we can all happily move on.
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Re: Financial advice for a newbie high earner

Postby stoptothink » Wed Mar 20, 2013 9:56 pm

ziszew wrote:
stoptothink wrote:<snip>
So, to be clear, you are advising him that "keeping up with the Joneses" is a good career move?

<snip>

I am going to disagree with the idea that purchasing a new vehicle is in any logical way an investment in his career and that it will gain him respect from his peers.

There isn't anything wrong with nice cars, just not the kind of advice I expected to see given on this board.


To be clear, no. In my first response I emphasized saving and investing (along with some links to reading, one book in particular about not trying to keep up with the Jonses) which seems to have been lost in your (multiple) replies to my later post that he consider replacing his fairly old car (using the word "sadly") this once with a less old one.

I didn't say it's a good investment or that it will win the respect of his peers, just a personal observation, based on our experience not even owning a car for almost the last decade with a "highly compensated" wage earner at a large institution (not in NYC where forgoing car ownership is more common), that as the unknown "new" guy it might make things easier and keep the focus off of "why he can't afford decent car." Then again, it might not. Thinking on it, the luxury brand suggestion wasn't necessary, but replacing it with something more recent won't hurt. Once he's established his brilliance, he can start sleeping in his Winnebago in the parking lot if he feels like it...

Also, he can keep driving his Toyota for another 14 years and continue to be highly successful. The beauty of my advice is that it can be ignored, but please don't twist it into something else entirely. I think it's clear that you disagree with that one piece and we can all happily move on.


Considering several people made direct replies countering your advice, I am going to wager that I am not the only person in this thread who has no clue what you are saying.
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